The Banking System Has Just Experienced an Increase in Deposits

question 420

Multiple Choice

The banking system has just experienced an increase in deposits of $50,000. The currency drain ratio is 20 percent and the desired reserve ratio is 10 percent. What does the money multiplier equal?

• A) 4.00
• B) 3.33
• C) 0.25
• D) 10.00

---

Definitions:

Alternative Dispute Resolution (ADR)

A range of procedures such as mediation and arbitration aimed at resolving disputes without the need for conventional litigation.

State Laws

The collection of laws and regulations enacted by individual states, governing various aspects of life and business within their respective jurisdictions.

Federal Laws

Statutes enacted by the national government that apply throughout the country, governing areas of legal jurisdiction not covered by state law.

Culture Of Inclusion

An organizational ethos that values diversity and promotes the inclusion of different perspectives, backgrounds, and talents.