Solved

If the Reserve Ratio Is 5 Percent, Then $1,000 of Additional

Question 189

Multiple Choice

If the reserve ratio is 5 percent, then $1,000 of additional reserves can create up to

A) $200 of new money.
B) $2,000 of new money.
C) $20,000 of new money.
D) None of the above is correct.

Related Questions

Q23: When the Fed conducts open-market purchases, A)banks buy

Q27: When there is a reserve requirement,banks A)must hold

Q44: The money multiplier equals 1/(1 - R),

Q52: Currency includes A)paper bills and coins. B)demand deposits. C)credit cards. D)Both

Q57: The money supply increases when the Fed A)lowers

Q78: Treasury Bonds are A)both a store of value

Q85: The Fed sets the interest that borrowers

Q89: The Federal Deposit Insurance Corporation A)protects depositors in

Q184: Given the following information, what are the

Q190: Credit cards are a medium of exchange.