If a Commercial Banking System Has $200,000 in Checkable Deposits

question 233

True/False

If a commercial banking system has $200,000 in checkable deposits, actual reserves of $70,000, and a reserve
ratio of 20 percent, then the banking system can expand the supply of money by a maximum of $180,000.

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Definitions:

Cast Iron

A type of iron-carbon alloy that is noted for its high resistance to wear and its ability to be cast into complex shapes.

Metering Valve

A component in the braking system that regulates the pressure to the brakes, often used in rear to balance braking force.

Proportioning Valve

A valve in a vehicle's braking system that adjusts the pressure between the front and rear brakes, ensuring balanced braking.

Delay

A situation in which something happens later than planned or expected.