If the Reserve Ratio Is 10 Percent,$1,400 of Additional Reserves

question 25

Multiple Choice

If the reserve ratio is 10 percent,$1,400 of additional reserves can create up to

• A)$140 of new money.
• B)$14,000 of new money.
• C)$140,000 of new money.
• D)None of the above is correct.

---

Definitions:

Efficiency Loss

The loss of economic efficiency that can occur when the equilibrium for a good or service is not achieved, leading to potential welfare loss.

Bargaining Tactics

Strategies used by parties in negotiations to enhance their positions and achieve more favorable outcomes.

Strikebreakers

Individuals who work or are employed in place of union workers who are on strike, thus undermining the strike action.

Lockout

A negotiating tactic in which a firm forbids its unionized workers to return to work until a new collective bargaining agreement is signed; a means of imposing costs (lost wages) on union workers.