Suppose the Desired Reserve Ratio Is 0

question 1

Multiple Choice

Suppose the desired reserve ratio is 0.2 and the Bank of Canada buys $100,000 in government securities from Big Bank.How much money can the chartered banking system create?  

• A) $1,000,000 
• B) $500,000 
• C) $100,000 
• D) $80,000

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Definitions:

Schwann Cells

Glial cells of the peripheral nervous system that wrap around axons, providing electrical insulation (myelination) and support for nerve regeneration.

Myelin Sheath

The fatty layer that surrounds and insulates nerve fibers, speeding up the transmission of nerve impulses.

Neurilemma

The outermost layer of a myelinated nerve fiber, which plays a crucial role in nerve regeneration and conduction.

Oligodendrocytes

A type of glial cell in the central nervous system responsible for producing and maintaining myelin sheaths around neurons.