The Following Is Information About a Banking System

question 172

Multiple Choice

The following is information about a banking system:
New currency deposited in the system = $40 billion;desired reserve ratio = 20%;
excess reserves prior to the currency deposit = $0.
-Refer to the above information.The $40 billion deposit of currency into chequing accounts will create excess reserves of:

• A) $20 billion.
• B) $32 billion.
• C) $40 billion.
• D) $0.

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Definitions:

Tennis

A racquet sport in which two or four players hit a lightweight ball back and forth across a net on a rectangular court.

Deductive Step

A part of reasoning where the conclusion is necessarily derived from the premises.

Modus Ponens

A logical argument form that, given premises "If P, then Q" and "P," concludes "Q," exemplifying a valid deductive reasoning pattern.

Disjunctive Syllogism

A valid argument form in logic where, given a disjunction and the negation of one of its terms, one logically infers the truth of the other term.