If the Required Reserve Ratio Is 10 Percent,currency in Circulation

question 95

Multiple Choice

If the required reserve ratio is 10 percent,currency in circulation is $400 billion,checkable deposits are $800 billion,and excess reserves total $0.8 billion,then the monetary base is

• A)$480 billion.
• B)$480.8 billion.
• C)$80 billion.
• D)$80.8 billion.

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Definitions:

Personal Tax Rate

The percentage of an individual's income that is paid to the government as tax.

Medium of Exchange

A medium of exchange is an intermediary instrument or system used to facilitate the sale, purchase, or trade of goods between parties.

Non-Interest-Bearing Asset

An asset that does not generate interest income for its holder.

Measure of Wealth

A metric or approach to evaluate the value of assets owned by individuals, businesses, or countries.