A Bank Which Must Hold 100 Percent Reserves Opens in an Economy

question 218

Multiple Choice

A bank which must hold 100 percent reserves opens in an economy that had no banks and a currency of $100. If customers deposit $50 into the bank, what is the value of the money supply?

• A)$50
• B)$100
• C)$150
• D)$200

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Definitions:

Riparian Rights

Legal entitlements of landowners to access and use water from a river, stream, or other watercourse flowing adjacent to their land.

Conservation Movement

A social and political effort aimed at preserving, protecting, and restoring the natural environment from degradation and exploitation.

Forest Reserves

Public lands set aside to preserve forest ecosystems, protect watersheds, and support biodiversity conservation.

Public Domain Lands

Lands owned by the government that are not reserved for governmental or specific uses and are available for private use under certain conditions, such as settlement and cultivation.