If Checking Deposits Increase by $6,000 After All Rounds of the Money-Creation

question 47

Multiple Choice

If checking deposits increase by $6,000 after all rounds of the money-creation process when the Fed buys $1,200 worth of U.S.government securities,the maximum value of the required reserve ratio is

• A)5
• B)0.75
• C)0.2
• D)1.2
• E)1.0

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Definitions:

Express Condition

A clearly stated, specific condition in a contract that must be met for the performance of the contract to be required or for a party to fulfill its obligations.

Implied Condition

A legal term referring to a term or condition not expressly stated in a contract but assumed to be included by necessity or by the nature of the agreement.

Materially Breach

A significant failure to perform one's duties under a contract that results in harm to the other party and provides grounds for termination of the agreement.

Total Breach

A significant failure to fulfill a core obligation of a contract, allowing the other party to terminate the agreement and seek damages.