A Banking System Has Total Deposits of $200 Billion and Total

question 62

Multiple Choice

A banking system has total deposits of $200 billion and total reserves of $50 billion. If the reserve requirement is 20%, what is the deposit creation potential of the banking system?

• A) $200 billion
• B) $10 billion
• C) $20 billion
• D) $50 billion

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Definitions:

Vacuum Extraction Tube

A device typically used during childbirth to assist in the delivery of a baby by applying suction to the baby’s head.

Fetus In Distress

A term denoting a condition in which a fetus does not receive adequate oxygen during pregnancy or labor, which may lead to complications if not promptly addressed.

Oxytocin

A substance that functions as both a hormone and neurotransmitter, playing key roles in the processes of childbirth and milk production, while also contributing to the development of social connections and trust.

Pitocin

A synthetic form of oxytocin used medically to induce labor or strengthen labor contractions during childbirth, and to control bleeding after delivery.