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

question 76

Multiple Choice

How much can the banking system increase deposits, given a required reserve ratio of 20 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:

Folic Acid

A B-vitamin essential for the proper development of the human body, particularly critical in preventing neural tube defects in developing fetuses.

Folic Acid

A B-vitamin essential for cell growth and metabolism, important for the production of DNA and RNA, and crucial for preventing birth defects during pregnancy.

Calcium

A chemical element and essential nutrient that is crucial for many bodily functions, including bone health and nerve transmission.

Iron

A chemical element with symbol Fe and atomic number 26, essential for human health as it plays a critical role in oxygen transport and metabolic processes.