Suppose the Entire Banking System Has $70,000 in Excess Reserves

question 103

Multiple Choice

Suppose the entire banking system has $70,000 in excess reserves and a required reserve ratio of 25 percent.The deposit-creation potential of the banking system is:

• A) $2,800
• B) $70,000
• C) $280,000
• D) $1,750,000

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Definitions:

Neurons

Basic working units of the brain, specialized cells conducting nerve impulses.

Hypothalamus

An area located beneath the thalamus in the brain responsible for regulating the autonomic nervous system and the pituitary gland's functions, including the regulation of body temperature, thirst, hunger, and additional systems that maintain body equilibrium.

Pituitary Gland

A pea-sized gland located at the base of the brain, crucial for regulating vital body functions and general wellbeing through the secretion of hormones.

Amygdala

A part of the brain's limbic system involved in processing emotions, especially fear and pleasure.