If Reserves in the Banking System Increase by $100, Then

question 1

Multiple Choice

If reserves in the banking system increase by $100, then chequable deposits will increase by $667 in the simple model of deposit creation when the desired reserve ratio is ________.

• A) 0.01
• B) 0.05
• C) 0.15
• D) 0.20

---

Definitions:

Aggregate Plan

A plan that translates annual business and marketing plans into a production plan to ensure inventory and resources are available to meet customer demand.

Inputs

Resources such as raw materials, labor, and capital that are used in the production process to create outputs.

Enterprise

A business or company, especially when considered in terms of its size, complexity, or organizational structure.

Downstream Partners

Companies or entities that perform activities in the later stages of the supply chain, closer to the end consumers, such as distributors and retailers.