If the Desired Reserve Ratio Is One-Third, Currency in Circulation

question 149

Multiple Choice

If the desired reserve ratio is one-third, currency in circulation is $300 billion, and chequable deposits are $900 billion, then the level of excess reserves in the banking system is ________.

• A) $300 billion
• B) $30 billion
• C) $3 billion
• D) 0

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Definitions:

Nature and Nurture

A debate concerning the relative importance of an individual's innate qualities (nature) versus their personal experiences (nurture) in determining or causing differences in physical and behavioral traits.

Determinism

The philosophical view that all events, including moral choices, are completely determined by previously existing causes.

Predictable

Describing an event or outcome that can be foreseen or anticipated based on current knowledge or patterns.

Behavior

The actions or reactions of an individual or group in response to external or internal stimuli.