If the Required Reserve Ratio Is 0

question 128

Multiple Choice

If the required reserve ratio is 0.1, the level of deposits is $1,000, the level of currency held by the public is $200 and the level of excess reserves is $100, then m₁ is _____.

• A) 0
• B) 1
• C) 2
• D) 3

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Definitions:

Propinquity Effect

A phenomenon where people form closer relationships with those physically nearer to them due to increased opportunities for interaction.

Friendship Patterns

The recurring dynamics, interactions, and behaviors observed within friendships, often influenced by cultural, societal, and personal factors.

Mere Exposure Effect

The tendency for individuals to develop a preference for things simply because they are familiar with them.

Propinquity Effect

The tendency for people to form friendships or relationships with those whom they encounter often, based on physical or geographical closeness.