Use the Following to Answer Questions

question 3

Multiple Choice

Use the following to answer questions :
Scenario: Money Supply Changes
The reserve requirement is 10% and Jack withdraws $5,000 travel money from his checkable deposit. Assume that banks do not hold any excess reserves and that the public holds no currency, only checkable bank deposits.
-(Scenario: Money Supply Changes) Look at the scenario Money Supply Changes. After the withdrawal reserves _____, and checkable deposits _____ by $5,000.

• A)decrease by $5,000; decrease
• B)decrease by $5,000; increase
• C)increase by $5,000; decrease
• D)increase by $500; increase

Understand the legal precedent and how it influences future case law.

Identify the characteristics and uses of dicta and how they differ from holdings in judicial opinions.

Grasp the procedural actions an appellate court can take on a lower court's decision (affirm, reverse, remand).

Distinguish between legally binding statements and illustrative or non-binding commentary within judicial opinions.

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Definitions:

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, often used in evaluating investment opportunities.

Interest Rate

The ratio of interest charged on a loan to the borrower, usually represented as a yearly percentage of the remaining loan amount.

Compound Interest

Calculating interest that includes both the original principal amount and all previously accumulated interest on a loan or deposit.

Simple Interest

The method of calculating interest charges based on the principal amount only, not compounding on accumulated interest.