If Reserves in the Banking System Increase by $200,then Checkable

question 3

Multiple Choice

If reserves in the banking system increase by $200,then checkable deposits will increase by $500 in the simple model of deposit creation when the required reserve ratio is

• A)0.04.
• B)0.25.
• C)0.40.
• D)0.50.

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Definitions:

Business Combination

A transaction in which an acquirer gains control of one or more businesses.

Consolidated Expenses

The total expenses of a group of companies after eliminating intercompany transactions, reported in consolidated financial statements.

Fair Value

An estimate of the price at which an asset or liability could be traded in a fair transaction between willing parties, other than in a forced or liquidation sale.