Answer the Question on the Basis of the Following Table

question 4

Multiple Choice

Answer the question on the basis of the following table for a commercial bank or thrift: $\begin{array}{c}\begin{array}{c}(1) \\\text {Legal Reserve}\\\underline{\text {Ratio (\%) }}\\10 \\20 \\25 \\30\end{array}\begin{array}{c}(2) \\\text {Checkable}\\\underline{\text {Deposits}}\\ \$ 40,000 \\40,000\\40,000\\40,000\end{array}\begin{array}{c}(3) \\\text {Actual}\\\underline{\text {Reserves}}\\\$ 10,000 \\10,000\\10,000\\10,000\end{array}\end{array}$

Refer to the table.When the legal reserve ratio is 20 percent,the money-creating potential of the entire banking system is:

• A) $4,000.
• B) $6,000.
• C) $8,000.
• D) $10,000.

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Definitions:

Saltwater Intrusion

The movement of saline water into freshwater aquifers, which can lead to contamination of drinking water sources and other consequences.

Dams

Structures built across rivers or streams to control water flow, used for water storage, flood prevention, and electricity generation.

Irrigated Land

Agricultural land that is supplied with water through artificial means to promote crop growth.

Salinity

The concentration of dissolved salts in a given volume of water.