If All the Banks in the Banking System Collectively Have

question 120

Multiple Choice

If all the banks in the banking system collectively have $20 million in cash reserves and have a target reserve ratio of 5%,the maximum amount of deposits the banking system can support is

• A)$4 million.
• B)$40 million.
• C)$80 million.
• D)$100 million.
• E)$400 million.

---

Definitions:

Spans

Refers to the scope or range of control that a manager has over a number of subordinates or the extent of a process or activity.

Decentralized

A system or organization where decision-making power is distributed among multiple units or levels, rather than concentrated at a single point.

Integration

The process of combining or coordinating separate elements into a unified whole, often used in technical and organizational contexts.

Elaboration

The process of adding more detail or information to something, often to clarify or explain further.