If the Desired Reserve Ratio Is Ten Percent, Currency in Circulation

question 152

Multiple Choice

If the desired reserve ratio is ten percent, currency in circulation is $400 billion, chequable deposits are $800 billion, and excess reserves total $0.8 billion, then the currency ratio is ________.

• A) .25
• B) .50
• C) .40
• D) .05

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Definitions:

Trading Range

A price range in which stocks are thought to appeal to the widest variety of investors. Typically between $30 and $100. Stock splits function to keep prices within a trading range when the stock is appreciating.

Small Investors

Individuals who commit capital to investments in smaller amounts compared to institutional investors, often with less access to sophisticated tools and information.

Par Value

The face value of a bond or the stated value of a stock, not necessarily its market value.

Common Stock

Equity security representing ownership in a corporation, providing voting rights and a share in profits through dividends.