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:

Current

The flow of electric charge through a conductor, a fundamental concept in electrical and electronic circuits.

Wye-Connected

A method of connecting three-phase motors or transformers where the ends are connected to form a "Y" shape, facilitating the use of both line and phase voltages.

Phase Current

The current that flows through any one phase of a multi-phase system, like in three-phase electrical systems.

Resistive Load

An electrical load that consumes power in the form of heat, and its resistance essentially remains constant throughout its operation.