If the Reserve Requirement Is 10% and a Bank Initially

question 261

Multiple Choice

If the reserve requirement is 10% and a bank initially receives $20,000 in deposits, then the maximum amount of money that the banking system can create is

• A) $20,000.
• B) $100,000.
• C) $180,000.
• D) $200,000.

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Definitions:

Societal Expectations

Refers to the anticipated behaviors and roles that society presumes individuals will follow based on cultural norms and traditions.

Conscious Mind

The aspect of the mind that is aware of the self, one's surroundings, and one's thoughts, feelings, and experiences at any given moment.

Reality Principle

The goals of the conscious mind, which finds what works in reality.

Structural Model

Sigmund Freud’s model of the mind with three parts: the id (or “it”), the ego (or “I”), and the super-ego (or “above I”).