If the Banking System Has $20 Billion in Excess Reserves

question 103

True/False

If the banking system has $20 billion in excess reserves and the reserve ratio is 10 percent, the system can
increase its loans by a maximum of $22 billion.

---

Definitions:

Neurons

Cells specialized in sending nerve messages, forming the core structure of the nervous system.

Synapse

The junction between two neurons or between a neuron and a muscle where electrical or chemical signals are transmitted from one cell to another.

Ganglia

Structures containing a number of nerve cell bodies, typically linked by synapses, and often forming a swelling on a nerve path.

Axons

Long, slender projections of nerve cells, or neurons, which are responsible for transmitting electrical impulses away from the neuron's body.