If a Bank Has a Required Reserve Ratio of 25

question 90

Multiple Choice

If a bank has a required reserve ratio of 25% and there is $10,000 in deposits,what is the maximum possible change to the money supply?

• A) $40,000
• B) $10,000
• C) $0
• D) $2,500
• E) $7,500

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Definitions:

Hunting

The practice or activity of chasing and killing wild animals for food, sport, or control purposes.

Farming

The practice of cultivating the land or raising stock, such as livestock or crops, to produce food and raw materials.

Insecticides

Chemical substances used to kill insects, playing a critical role in pest control and agriculture.

Renewable Energy

Energy generated from natural processes that are continuously replenished, such as sunlight, wind, rain, tides, and geothermal heat.