If the Desired Reserve-Deposit Ratio Is 0

question 87

Multiple Choice

If the desired reserve-deposit ratio is 0.25 and the banking system receives an additional $10 million in reserves, bank deposits will increase by:

• A)$10 million.
• B)$250 million.
• C)$40 million.
• D)$4 million.

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Definitions:

John Trumbull

An American artist known for his historical paintings, particularly those that capture scenes from the American Revolutionary War.

American Revolution

The period (1765-1783) during which the thirteen American colonies fought for and gained independence from British rule.

Hamilton's Concept

Refers to Alexander Hamilton's financial policies designed to stabilize the American economy, including the creation of the national bank and assumption of state debts by the federal government.

Republican Man

A term that references the ideals of Republicanism in the context of American politics and society, historically highlighting civic virtue and participation.