If Reserves in the Banking System Increase by $100,then Checkable

question 38

Multiple Choice

If reserves in the banking system increase by $100,then checkable deposits will increase by $1,000 in the simple model of deposit creation when the required reserve ratio is

• A)0.01.
• B)0.10.
• C)0.05.
• D)0.20.

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Definitions:

Comparative Advantage

Comparative advantage refers to the ability of an entity to produce a good or service at a lower opportunity cost compared to others.

Production

The process of creating goods or services by combining various resources like labor, materials, and technology.

Feasible Terms

Conditions or criteria that can be realistically achieved or met in a particular context or agreement.

Production Possibilities

The different combinations of goods and services that a society can produce given its available resources and technology.