Refer to the Accompanying Consolidated Balance Sheet for the Commercial

question 173

Multiple Choice

Refer to the accompanying consolidated balance sheet for the commercial banking system. Assume the required reserve ratio is 10 percent. All figures are in billions. After the deposit of $10 billion of new currency, the maximum
Amount by which this commercial banking system can expand the supply of money by lending is

• A) $9 billion.
• B) $45 billion.
• C) $36 billion.
• D) $90 billion.

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Definitions:

Encoding Failure

The inability to form new memories because the information was not effectively encoded into long-term memory.

Nonsense Syllables

Strings of letters that do not follow grammatical rules and do not have meaning, used in memory and learning experiments.

Encoding Failure

The inability to recall specific information because of insufficient encoding of the information at the time of memory formation.

Repression

A defense mechanism where unpleasant thoughts, feelings, or desires are excluded from conscious awareness.