Suppose Warren Buffet Withdraws $1 Million from His Checking Account

question 136

Multiple Choice

Suppose Warren Buffet withdraws $1 million from his checking account at Chase Bank.If the required reserve ratio is 20 percent,what is the maximum change in deposits in the banking system?

• A)-$5 million
• B)-$4 million
• C)-$200,000
• D)$1 million
• E)$5 million

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Definitions:

Subordinates

Employees or team members who are under the direction and control of a senior manager or supervisor in an organizational hierarchy.

Manager

A person responsible for controlling or administering an organization or group of staff, focusing on achieving goals through directing efforts and resources.

Chain Of Command

The formal line of authority, communication, and responsibility within an organization.

Mechanistic Organization

A form of organizational structure characterized by rigid hierarchies, strict rules, and a high degree of formalization.