Suppose the Banking System Currently Has $300 Billion in Reserves

question 142

Multiple Choice

Suppose the banking system currently has $300 billion in reserves, the reserve requirement is 5 percent, and excess reserves are $30 billion. What is the level of loans?

• A)$270 billion
• B)$5,400 billion
• C)$6,000 billion
• D)$5,100 billion

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Definitions:

Bouquets

An arrangement of flowers that are typically gathered at the stems and often used as gifts or decorations.

Variable Costs

Costs that change in proportion to the level of output or activity in a business.

Square Feet

A measure of area in the imperial system, used to calculate the size of a space, equivalent to the area of a square with sides one foot in length.

Variable Costs

Costs that vary directly with the level of production or output.