In the Simple Deposit Expansion Model, If the Bank of Canada

question 104

Multiple Choice

In the simple deposit expansion model, if the Bank of Canada purchases $100 worth of bonds from a bank that previously had no excess reserves, deposits in the banking system can potentially increase by ________.

• A) $10
• B) $100
• C) $100 times the reciprocal of the desired reserve ratio
• D) $100 times the desired reserve ratio

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Definitions:

Dow Chemical Canada

A subsidiary of The Dow Chemical Company, operating in Canada and focused on the manufacture and supply of chemical products.

Strategic Plan

An organized procedure for forecasting a preferred future, and turning this forecast into wide-ranging goals or objectives, followed by a plan of action to accomplish them.

Service-Quality Dimension

Aspects that customers use to evaluate the performance and quality of a service, including reliability, responsiveness, assurance, empathy, and tangibles.

Tangibles

Physical items or properties that can be seen, touched, and measured, as opposed to intangible assets like patents or copyrights.