Scenario 14-2 Imagine That Kristy Deposits $10,000 of Currency into Her Checking

question 230

Multiple Choice

Scenario 14-2
Imagine that Kristy deposits $10,000 of currency into her checking account deposit at Bank A and that the required reserve ratio is 20%.
-Refer to Scenario 14-2.As a result of Kristy's deposit,Bank A's reserves immediately increase by

• A)$2,000.
• B)$8,000.
• C)$10,000.
• D)$50,000.

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Definitions:

Capacity Utilization Rate

A metric used to measure the rate at which potential output levels are being met or used.

Interest Rate

The percentage at which interest is charged or paid on amounts of money, reflecting the price of credit or returns on investment.

Personal Property

Movable property that is not attached to real estate, including vehicles, furniture, and personal belongings.

U.S. Government Bonds

Debt securities issued by the United States Department of the Treasury to fund federal government operations and obligations, considered low-risk investments.