If a Commercial Banking System Has $200,000 in Checkable Deposits

question 113

True/False

If a commercial banking system has $200,000 in checkable deposits and actual reserves of $70,000, then with a reserve ratio of 20 percent the banking system can expand the supply of money by a maximum of $180,000.

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Definitions:

Rival

A good whose consumption by one person diminishes the quantity or quality available for consumption by others.

Price Leadership

An informal method that firms in an oligopoly may employ to set the price of their product: One firm (the leader) is the first to announce a change in price, and the other firms (the followers) soon announce identical or similar changes.

Oligopoly

An oligopoly is a market structure characterized by a small number of firms dominating the market, where each firm has significant control over prices and other market factors.

Collusion

A non-competitive, secret, and often illegal agreement between rivals aiming to disrupt the market's equilibrium by controlling the market price, production, or marketing of goods and services.