In a Deposits-Only Monetary System with a 5% Required Reserve

question 387

Multiple Choice

In a deposits-only monetary system with a 5% required reserve ratio, a bank deposit of $1,000 will increase the total amount of bank deposits by:

• A)$5,000.
• B)$10,000.
• C)$20,000.
• D)$50,000.

---

Definitions:

Soviet Union

A former federal socialist state in Eurasia that existed from 1922 to 1991, made up of 15 republics, and was the largest country in the world.

Competition

The rivalry among sellers trying to achieve such goals as increasing profits, market share, and sales volume.

American Industry

Refers to the manufacturing and economic sectors of the United States which contribute to its Gross Domestic Product (GDP).

Influence Over Price

Influence over price describes the extent to which a producer or a group of producers can determine the selling price of their goods or services in the market.