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The Accompanying Table Gives Data for a Commercial Bank or
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Question 254

Multiple Choice

 (1)  (2) (3)  Legal Reserve Ratio (%)   Checkable Deposits  Actual Reserves 10$40,000$10,0002040,00010,0002540,00010,0003040,00010,000\begin{array} { | c | c | c | } \hline \text { (1) } & ( 2 ) & ( 3 ) \\\hline \text { Legal Reserve Ratio (\%) } & \text { Checkable Deposits } & \text { Actual Reserves } \\\hline 10 & \$ 40,000 & \$ 10,000 \\\hline 20 & 40,000 & 10,000 \\\hline 25 & 40,000 & 10,000 \\\hline 30 & 40,000 & 10,000 \\\hline\end{array} The accompanying table gives data for a commercial bank or thrift. When the legal reserve ratio is 20 percent, the money-creating potential of the entire banking system is


A) $4,000.
B) $6,000.
C) $8,000.
D) $10,000.

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