If the Banking System Has $50 Billion in Excess Reserves

question 93

Multiple Choice

If the banking system has $50 billion in excess reserves, and the required reserve ratio is 25 percent, what is the maximum amount by which the money supply can be increased?

• A) $250 billion
• B) $200 billion
• C) $50 billion
• D) $25 billion

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Definitions:

Hypothalamus

A region of the brain that plays a crucial role in many important functions, including releasing hormones and regulating body temperature.

Depressants

A class of drugs that reduce neural activity and slow down the functions of the body, often used to induce calmness or sleep.

Agonist

A chemical or drug that binds to receptors in the brain and causes an action or response, often mimicking the effects of naturally occurring substances.

Neurotransmitter

Chemical substances that transmit signals across a synapse from one neuron to another.