If the Reserve Ratio Is 100-Percent, Then a New Deposit

question 37

Multiple Choice

If the reserve ratio is 100-percent, then a new deposit of $500 into a bank account

• A)eventually increases the money supply by $500.
• B)leaves the size of the money supply unchanged.
• C)eventually decreases the size of the money supply by $500.
• D)None of the above is correct.

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Definitions:

Normal Distribution

A distribution of probabilities that is even around the average, indicating that occurrences close to the mean happen more often.

Sample

A subset of the population.

Test Statistic

A metric derived from data in a sample during a hypothesis testing process, employed to decide if the null hypothesis should be discarded.

Proportions

Ratios indicating the fractional part of a whole that have specific characteristics.