Maximum checkable-deposit expansion in the banking system is equal to
A) actual reserves minus required reserves.
B) assets plus net worth and liabilities.
C) excess reserves times the monetary multiplier.
D) excess reserves divided by the monetary multiplier.

Question

Quizplus · Accepted Answer

The maximum checkable-deposit expansion in the banking system is equal to excess reserves times the monetary multiplier. This is because the monetary multiplier reflects how much the initial deposit can be amplified through the banking system.

Maximum Checkable-Deposit Expansion in the Banking System Is Equal to