Use the Following to Answer Questions

question 417

Multiple Choice

Use the following to answer questions :
Scenario: Holding Cash
Suppose that the public holds 50% of the money supply in currency and the reserve requirement is 20%. Banks hold no excess reserves. A customer deposits $6,000 in her checkable deposit.
-(Scenario: Holding Cash) Look at the scenario Holding Cash. Assume that after receiving the deposit, the bank lends out its excess reserves. When the loan is spent, _____ of the loan will be a checkable deposit and _____ will be held by the public as cash.

• A)$6,000; $0
• B)$4,800; $1,200
• C)$2,400; $2,400
• D)$3,000; $3,000

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Definitions:

Cold Turkey

The abrupt cessation of a substance or behavior that one is addicted to, without the aid of reducing the habit gradually or using replacement medication.

E-cigarettes

Electronic devices that simulate tobacco smoking by producing an aerosol, often referred to as vapor, that users inhale.

Smoking

The act of inhaling and exhaling the smoke of tobacco or a drug, which has various health risks including respiratory diseases, heart disease, and cancer.

Dopamine Neurons

Specialized nerve cells that produce and release dopamine, a neurotransmitter that plays key roles in motivation, reward, and movement.