Answer the Question on the Basis of the Following Information

question 100

Multiple Choice

Answer the question on the basis of the following information about a banking system: new currency deposited in the system = $40 billion;legal reserve ratio = 0.20;excess reserves prior to the currency deposit = $0. Refer to the information.The $40 billion deposit of currency into checking accounts will initially create:

• A) $8 billion of new checkable deposits.
• B) $10 billion of new checkable deposits.
• C) $40 billion of new checkable deposits.
• D) $200 billion of new checkable deposits.

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Definitions:

Present State

The current condition or situation of a system, process, or entity at a specific point in time.

Position Power

The authority or influence an individual has due to their role or position within an organization.

Influence Superiors

The ability to affect the decisions, actions, or perceptions of higher-ranking individuals or management in an organization.

Personal Power

The influence or authority one has derived from their personal attributes or abilities, enabling them to affect the actions of others.