If Reserves in the Bank of Canada Increase by $100

question 142

Multiple Choice

If reserves in the Bank of Canada increase by $100, then chequable deposits will increase by $400 in the simple model of deposit creation when the desired reserve ratio is ________.

• A) 0.01
• B) 0.10
• C) 0.20
• D) 0.25

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Definitions:

Investment Opportunity

A situation where funds can be placed in a venture with the expectation of earning a return on the investment.

Return on Investment (ROI)

Return on Investment (ROI) is a performance measure used to evaluate the efficiency of an investment, calculated by dividing the profit of an investment by its cost.

Last Year's

Refers to the figures, statistics, or conditions from the previous calendar year.

Turnover

The rate at which inventory or assets of a business are replaced or sold within a given period.