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

---

Definitions:

Roulette-type Games

Games of chance that are characterized by a spinning wheel and a ball that determines the winning number or color.

Charity Bazaar

is a fundraising event organized to support charitable causes, often featuring goods for sale, entertainment, and food.

Availability Heuristic

A quick mental strategy that draws on the initial instances that spring to mind for someone when thinking about a certain topic, notion, strategy, or decision-making process.

Ungenerous Person

An individual who is not willing to give or share things, especially money, freely or in a way that shows kindness.