If a Banking System Receives an Initial Deposit of $150

question 60

Multiple Choice

If a banking system receives an initial deposit of $150, 000 and the reserve requirement is 40 percent, the total deposit in the banking system (including the initial deposit) can be expanded by _____.

• A)$375, 000
• B)$150, 000
• C)$60, 000
• D)$250, 000
• E)$450, 000

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Definitions:

Dinitrophenol

A class of organic compounds that contain a phenol ring and two nitro groups, known for their use in biochemistry and weight loss.

Dinitrochlorobenzene

An aromatic compound with two nitro groups and one chloro group attached to a benzene ring, used in the manufacture of dyes and explosives.

Protonation

The addition of a proton (H+) to an atom, molecule, or ion, usually increasing its net positive charge.

Sodium Hydroxide

A strong base and alkali that is highly soluble in water, forming caustic solutions, commonly used in many industrial and laboratory processes.