Suppose the Required Reserve Ratio Is 25% and a Customer

question 320

Multiple Choice

Suppose the required reserve ratio is 25% and a customer deposits $300 in her checkable deposit. The money supply will _____ if the banking system does NOT hold any excess reserves.

• A)increase by $1,200
• B)increase by $900
• C)increase by $300
• D)be unchanged

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Definitions:

Low-value

Refers to items or services perceived as having a lower worth or importance, often associated with lower prices or quality.

Selling Price

The amount of money charged for a product or service; the price at which an item is sold to the public.

Less Aggressively

A comparative manner of acting or proceeding with less force, intensity, or assertiveness than before or than others.

Oral Auction

A public sale in which goods or property are sold to the highest bidder through spoken bids.