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Ultimate Flashcard Review
Video
Banking and the Expansion of the Money Supply
Key Concepts to Understand
Question 1 of 4
A customer deposits $2,000 into a checking account at a bank that has a required reserve ratio of 10%. How much must the bank keep as required reserves, and how much is available to be loaned out as excess reserves?
$2,000 required, $0 excess.
$1,800 required, $200 excess.
$1,000 required, $1,000 excess.
$200 required, $1,800 excess.
Practice Questions: Test Your Understanding
Apply what you've learned with these practice questions. These questions test your understanding of the key concepts.
Question 1 of 3
Suppose the required reserve ratio is 10%. If Sarah deposits $1,000 cash into her checking account at First Bank, what is the maximum possible increase in the total money supply from this single deposit?
$100
$900
$1,000
$9,000
$10,000
Key Takeaways
- 📊Master the fundamentals: Understanding these core concepts is essential for success in AP Economics.
- ✅Practice makes perfect: Use the interactive exercises and practice questions to reinforce your understanding.