Economics Multiple Choice Question – 28 November 2022

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Economics
Photo by Quang Nguyen Vinh on Pexels.com

A closed economy has a banking system consisting of a single bank.

The bank operates with a cash ratio of 10%.

Customers deposit £10,000 in cash.

Assuming no subsequent change in notes and coins in circulation what is the maximum amount of loans that the bank can create?

Select ONE answer:

  1. £1,000
  2. £9,000
  3. £90,000
  4. £100,000

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 3

  1. Not correct
  2. Not correct
  3. Correct
  4. Not correct

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Author: stuart001uk2014

Referral marketing, business, economics and accounting s​pecialist & corporate mentor

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