Only One Commercial Bank in the Banking System Has an Excess

question 55

Multiple Choice

Only one commercial bank in the banking system has an excess reserve, and its excess reserve is $400,000.This bank makes a new loan of $300,000 and keeps an excess reserve of $100,000.If the required reserve ratio for all banks is 12.5 percent, the potential expansion of the money supply from this new loan is

• A)$37,500.
• B)$300,000.
• C)$2.4 million.
• D)$3.2 million.

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Earthquakes

Natural phenomena characterized by the shaking of the ground, caused by the sudden release of energy in the Earth's crust.

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Openings in Earth's crust that allow molten rock, ash, and gases to escape from below the surface.

Earthquakes

Natural phenomena involving the shaking of the ground, usually caused by the movement of tectonic plates beneath the Earth's surface.