Assume That the Banking System Has Deposits of $10 Billion

question 47

Multiple Choice

Assume that the banking system has deposits of $10 billion and excess reserves of $1 billion at a time when the reserve ratio is 10 percent.If the reserve ratio rises to 20 percent,the banking system then has:

• A)excess reserves of $2.0 billion
• B)neither an excess nor a deficiency of reserves
• C)a deficiency of reserves of $0.5 billion
• D)excess reserves of only $0.5 billion
• E)a deficiency of reserves of $1.0 billion

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Definitions:

Population Mean

Population mean is the average of all the values in a population.

Standard Deviation

A statistic that measures the dispersion or variation of a dataset relative to its mean, indicating how spread out the data points are.

Population Mean

The average value of all items in a population, representing the central point of a data set.

Confidence Interval

A range of values, derived from sample statistics, that is used to estimate the true value of a population parameter with a certain level of confidence.