When Bank Deposits Increase from $1 Million to $2 Million

question 162

Multiple Choice

When bank deposits increase from $1 million to $2 million, banks' required reserves increase from $100,000 to $200,000. The required reserve ratio is

• A) 10.0.
• B) 0.10.
• C) 1.00.
• D) 0.25.

---

Definitions:

Mental Set

A tendency to approach situations in a certain way due to past experiences or habits.

Foreign Language Course

An educational program designed to teach students a language that is not their native or primary language.

Cognitive Bias

A systematic error in thinking that affects judgments and decisions, often leading to deviations from standard rationality or good judgment.

Medical Treatment

The management and care of a patient to combat disease or disorder.