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Exhibit: Deposit Expansion Stages

-(Exhibit: Deposit Expansion Stages) What is the value of $H (the total loans)?
A) $1,000
B) $4,000
C) $5,000
D) $6,000

Question

Use the following to answer questions .
Exhibit: Deposit Expansion Stages
 
-(Exhibit: Deposit Expansion Stages) What is the value of $H (the total loans)?
A) $1,000 
B) $4,000 
C) $5,000 
D) $6,000

Quizplus · Accepted Answer

The total loans are equal to the initial deposit multiplied by the deposit expansion multiplier. In this case, the initial deposit is $1,000 and the deposit expansion multiplier is 4. Therefore, the total loans are $1,000 x 4 = $4,000.

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