Assume the Following: a 10 Percent Required Reserve Ratio, Banks

question 42

Multiple Choice

Assume the following: a 10 percent required reserve ratio, banks do not hold excess reserves, and the public does not hold cash. Given an initial $500 deposit, what is the maximum amount of new loans and deposits the banking system as a whole can create?

• A)$400
• B)$450
• C)$2,500
• D)$5,000

Recognize the role and impact of data aggregators and privacy laws.

Learn about the business models of companies that impact privacy.

Grasp the principles and practices for ethical decision-making and ethics in technology.

Understand the mechanisms and implications of electronic surveillance.

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Definitions:

Federal Government Revenue

The income the federal government receives from taxes, fees, and earnings from its investments, used to fund public services and obligations.

Corporate Income Taxes

Taxes imposed on the income of corporations, which are calculated based on the profits these firms generate.

Property Taxes

Taxes levied by local governments based on the value of real estate property owned by individuals or businesses.

Payroll Taxes

Taxes imposed on employers and employees, calculated as a percentage of the salaries that employers pay their staff.