A Bank Has $100,000 in Checkable Deposits and $30,000 in Reserves

question 100

Multiple Choice

A bank has $100,000 in checkable deposits and $30,000 in reserves. If the required reserve ratio is 20%, what is the maximum amount of loans this bank can create?

• A) $0
• B) $10,000
• C) $20,000
• D) $30,000

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Definitions:

Tight Junction

Cell junctions in epithelial or endothelial cellular sheets that prevent the passage of molecules and ions between the cells.

Secretory Function

The process by which cells and glands produce and release substances such as enzymes, hormones, or sweat.

Stratified Squamous

A type of epithelial tissue composed of several layers of flat cells intended to protect underlying tissues in areas subject to abrasion.

Simple Cuboidal

A type of epithelial tissue with cube-shaped cells, typically involved in secretion and absorption.