If the Reserve-Deposit Ratio Is 10% and the Banking System

question 100

Multiple Choice

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

• A) $4 million.
• B) $10 million.
• C) $40 million.
• D) $100 million.
• E) $250 million.

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Definitions:

Irrigation Pump

A device used to move water from a source to a field to aid in the cultivation of crops.

Breakeven

The point at which total cost and total revenue are equal, meaning there is no net loss or gain.

Markdown

A reduction from the original or usual price of an item or service.

Mark-up

A surplus included in the goods' purchase price to compensate for overhead costs and gain, determining the final sales price.