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:

Figure

An object's shape, outline, or representation in art or mathematics, or a notable person in a particular field.

Syllogism

A form of reasoning in which a conclusion is drawn from two given or assumed propositions (premises); a logical structure that uses three parts.

Middle Term

In a categorical syllogism, the term that appears in both premises and links together the major and minor terms.

Syllogism

A form of logical argument that applies deductive reasoning to arrive at a conclusion based on two or more propositions that are asserted or assumed to be true.