If the Required Reserve Ratio Is 3%, an Initial Demand

question 15

Multiple Choice

If the required reserve ratio is 3%, an initial demand deposit made in a bank of $100,000 can result in an expansion in the money supply of

• A)$1,300,000.
• B)$3,000,000.
• C)$3,333,000.
• D)$3,500,000.

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Definitions:

Global Village

A term that describes how the world has been made smaller and more interconnected by electronic communication, leading to an increase in the awareness of global issues.

McLuhan

A theorist known for his work on media theory, famously coining the phrase "the medium is the message."

Machiavelli

A Renaissance political philosopher known for his work "The Prince," advocating for pragmatic and sometimes ruthless political strategies.

Locke

Refers to John Locke, a 17th-century philosopher known for his contributions to liberalism, political philosophy, and theories of mind and consciousness.