If the Banking System Has $20 Billion in Excess Reserves

question 63

True/False

If the banking system has $20 billion in excess reserves and if the reserve ratio is 10 percent, the system can increase its loans by a maximum of $22 billion.

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Definitions:

Umbilical Vein

A blood vessel in a fetus that carries oxygenated blood from the placenta to the fetus.

Inferior Vena Cava

Vein that returns blood from the lower limbs and the greater part of the pelvic and abdominal organs to the right atrium.

Meconium

First intestinal discharges of the newborn infant, greenish in color and consisting of epithelial cells, mucus, and bile.

Milk Letdown

Expulsion of milk from the alveoli of the mammary glands; stimulated by oxytocin.