Scenario 25-2 Imagine That Kristy Deposits $10,000 of Currency into Her Checking

question 197

Multiple Choice

Scenario 25-2

Imagine that Kristy deposits $10,000 of currency into her checking account deposit at Bank A and that the required reserve ratio is 20%.

-Refer to Scenario 25-2. As a result of Kristy's deposit, Bank A's reserves immediately increase by

• A) $2,000.
• B) $8,000.
• C) $10,000.
• D) $50,000.

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Definitions:

Equilibrium

The state in which market supply and demand balance each other, and as a result, prices become stable.

Market

A place or system where parties engage in exchange, buying and selling goods and services.

S And D

Shorthand for Supply and Demand, the interaction between the quantity of goods offered by the market and the desires of consumers.

Overproduction

A situation where more goods are produced than can be sold, leading to surplus inventory and often resulting in waste or economic imbalances.