If the Required Reserve Ratio Is 0

question 62

Multiple Choice

If the required reserve ratio is 0.25 and the First National Bank holds $10 million in demand deposits and $2.5 million in reserves,how much more money is the bank capable of creating?

• A) $0
• B) $0.625 million
• C) $1.875 million
• D) $2.5 million
• E) $10 million

---

Definitions:

Freud

Sigmund Freud was an Austrian neurologist who founded psychoanalysis, a method for treating psychopathology through dialogue between a patient and a psychoanalyst.

Adult Personality

The combination of characteristics or qualities that form an individual's distinctive character in adulthood, often considered relatively stable over time.

Self-Concept

An individual's perception of themselves, including beliefs about one’s attributes, roles, goals, and competencies.

Incongruence

A state of being where there is a discrepancy between one's self-image and the reality of one’s experiences or behaviors, often leading to psychological distress.