In the Simple Deposit Expansion Model,if the Required Reserve Ratio

question 118

Multiple Choice

In the simple deposit expansion model,if the required reserve ratio is 20 percent and the Fed increases reserves by $100,checkable deposits can potentially expand by

• A)$100.
• B)$250.
• C)$500.
• D)$1,000.

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Definitions:

Nonpayers

Individuals or entities that do not contribute payments towards a service or good from which they benefit.

Public Good

A good that is non-excludable and non-rivalrous, meaning that its consumption by one individual does not reduce availability to others.

Benefits

Advantages or gains that are derived from a specific action, policy, or product, including intangible and tangible outcomes.

Excludable

A characteristic of a good or service that means it is possible to prevent people who have not paid for it from having access to it.