How Much Can the Banking System Increase Deposits, Given a Required

question 88

Multiple Choice

How much can the banking system increase deposits, given a required reserve ratio of 100 percent, an initial injection of $1,000 worth of reserves, and no excess reserve or currency drain?

• A)$1,000
• B)$5,000
• C)$10,000
• D)$20,000

---

Definitions:

Stereoscopic Vision

A type of vision where two slightly different images from each eye are combined in the brain to give the perception of depth.

Hominoid Ancestor

A term referring to any ancestral species within the Hominidae family, which includes modern humans and their direct ancestors.

Prehensile Tails

Refers to tails found in certain animals that are capable of grasping or holding objects, aiding in locomotion or manipulation of their environment.

Knuckles

The joints of the fingers which are visible when the hand is clenched, serving as points of flexion for the fingers.