If the Required Reserve Ratio Is One-Third,currency in Circulation Is

question 31

Multiple Choice

If the required reserve ratio is one-third,currency in circulation is $300 billion,and checkable deposits are $900 billion,then the money supply is ________ billion.

• A)$2,700
• B)$3,000
• C)$1,200
• D)$1,800

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Definitions:

Corporate Profits Tax

A tax imposed by governments on the income of corporations, differentiating from personal income taxes.

Ceteris Paribus

A Latin phrase that means "all other things being equal," used in economics to isolate the effect of one variable changes while holding others constant.

Investment

Allocating financial assets or resources in the hope of receiving future income or profit.

Market Rate Of Interest

The prevailing interest rate available in the marketplace for investments, loans, and savings, varying based on demand, supply, and monetary policy.