If the Desired Reserve Ratio Is One-Third, Currency in Circulation

question 149

Multiple Choice

If the desired reserve ratio is one-third, currency in circulation is $300 billion, and chequable deposits are $900 billion, then the level of excess reserves in the banking system is ________.

• A) $300 billion
• B) $30 billion
• C) $3 billion
• D) 0

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Definitions:

Catalog List Price

The advertised price of a product or service in a catalog, before any discounts or promotions.

Cost of Inventory Sold

The total cost of goods sold during a specific period, including the cost of acquiring or manufacturing the goods.

Sales

The transactions involved in selling goods or services to customers, generating revenue for a business.

FOB Destination

A shipping term indicating that the seller bears all costs and risks until the goods are delivered to the buyer's specified location.