Assume First Central Bank Has a Desired Reserve Ratio of 15

question 132

Multiple Choice

Assume First Central Bank has a desired reserve ratio of 15 percent;$80,000 in total deposits,loans equal to $60,000,and has $20,000 in actual reserves.First Central can make additional loans totaling

• A)$8,000.
• B)$12,000.
• C)$20,000.
• D)$60,000.
• E)$80,000.

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Definitions:

Government Spending

The total of all government expenses, including salaries, defense, education, and public services.

Net Taxes

refer to the total amount of taxes paid to governments by individuals and businesses after accounting for transfers and subsidies received from the government.

Aggregate Expenditure

The sum of all expenditures within an economy, encompassing spending on goods and services, investment in businesses, government outlays, and the balance of exports minus imports.

Disposable Income

The amount of money a household or individual has available to spend or save after income taxes have been deducted.