A Banking System Has Total Deposits of $500 Billion and Total

question 89

Multiple Choice

A banking system has total deposits of $500 billion and total reserves of $140 billion. If the required reserve ratio is 20%, what is the deposit creation potential of the banking system?

• A) $280 billion
• B) $500 billion
• C) $140 billion
• D) $200 billion

---

Definitions:

F-test

is a statistical test used to compare the variances of two populations, based on sample variances, to assess the equality of the populations' means.

Hypothesis

A proposed explanation or prediction about a phenomenon that can be tested through research and experimentation.

Sales Dollars

The total revenue generated from sales, expressed in dollars.

One-tailed T-test

A statistical test used to determine if a sample mean significantly exceeds or is significantly less than a hypothesized value.