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Use the Following Example to Answer the Following Questions

Question 123

Multiple Choice

Use the following example to answer the following questions:
Imagine that Stella deposits $25,000 in currency (which she had been storing in her closet) into her checking account at the bank.Assume that this institution has a required reserve ratio of 25 percent.
-As a result of this deposit,what is the maximum amount in loans that can be made by all the banks in the banking system?


A) $0
B) $18,750
C) $25,000
D) $31,250
E) $100,000

Correct Answer:

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