Refer to the information provided in Scenario 25.2 below to answer the question(s) that follow.SCENARIO 25.2: The following table shows the changes in deposits, reserves, and loans of 4 banks as a result of a $100,000 initial deposit in Bank No. 1. Assume all banks are loaned up.Refer to Scenario 25.2. How much money will be created based on the initial $100,000 deposit?
A. $1 million
B. $2 million
C. $16.67 million
D. $50 million
Answer: A
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Let's be careful about defining our terms properly. Aggregate supply is the total value of
a. goods produced in the manufacturing sector that they are willing and able to supply at varying price levels b. goods and services that firms in the economy are willing and able to supply at varying price levels c. services that suppliers are willing and able to supply at varying price levels d. goods and services less the amount exported that firms are willing and able to supply at varying price levels e. goods and services including imports that firms are willing and able to supply at varying price levels
Deadweight loss
A. can result from underproduction, but not from overproduction. B. can result from overproduction, but not from underproduction. C. is measured as the combined loss of consumer surplus and producer surplus. D. results from producing a unit of output for which the maximum willingness to pay exceeds the minimum acceptable price.