Use the Following to Answer Questions

question 379

Multiple Choice

Use the following to answer questions:
The reserve requirement is 20%.Leroy receives $1000 as a graduation present and deposits the money in his chequing account.The bank does NOT want to hold excess reserves.
-(Scenario: Money Creation) Refer to Scenario: Money Creation.How much of the $1000 deposit is the bank required to keep in reserves?

• A) $1000
• B) $100
• C) $200
• D) $800

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Definitions:

Geometric Sequence

A sequence in which each number following the first is generated by multiplying the former number by a fixed, nonzero factor, this factor is identified as the common ratio.

Partial Sum

The sum of a portion of a sequence of terms, or a method of summing certain numbers by grouping.

N Th

Referring to an unspecified member of a series or set.

Increasing Annuity

An annuity payment plan where the payment amounts increase over time.