Suppose You Deposit $1,000 Cash in Your Checking Account at a Bank

question 175

Multiple Choice

Suppose you deposit $1,000 cash in your checking account at a bank. If the bank is loaned up and if the required reserve ratio is 10%, the maximum amount that the bank can lend now, following your deposit is

• A) $100.
• B) $900.
• C) $1,000.
• D) $10,000.

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Definitions:

Valve Division

A business segment or department within a larger company that specializes in the production, distribution, and sale of valves.

Customer Service Department

A division within a company that handles customer inquiries, complaints, and provides support and assistance.

Variable Costs

Money spent that varies depending on the quantity of items made or sold, including the expenses for materials and manpower.

Fixed Costs

Costs that remain constant regardless of the amount of goods produced or sold during a specific timeframe, including rent, wages, and insurance premiums.