After the Reserve Bank Increases Reserves in the Banking System

question 34

Multiple Choice

After the Reserve Bank increases reserves in the banking system through open-market purchases, banks create new deposits through multiple rounds of lending and accepting deposits, until the:

• A)Reserve Bank requires them to stop
• B)deposit insurance limit is reached
• C)actual reserve-deposit ratio is greater than the desired reserve-deposit ratio
• D)actual reserve-deposit ratio is equal to the desired reserve-deposit ratio

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Definitions:

Group Behavior

Refers to the ways in which people behave, interact, and influence each other in a collective context.

Brainstorming

A collective approach intended to elicit a high volume of solutions for a problem.

Disadvantages

Conditions or situations that put someone or something at a disadvantage or hinder their progress.

Toxic Leaders

Leaders who are destructively self-centered, abusive, and may hinder or harm the organization’s and members’ well-being.