Refer to the Information Provided in Scenario 25

question 55

Multiple Choice

Refer to the information provided in Scenario 25.1 below to answer the question(s) that follow.
SCENARIO 25.1: The following table shows the changes in deposits, reserves, and loans of 4 banks as a result of a $100,000 initial deposit in Bank No. 1. Assume all banks are loaned up.
-Refer to Scenario 25.1. What is the required reserve ratio?

• A) 4%
• B) 5%
• C) 8%
• D) 10%

---

Definitions:

Aficionado's

Enthusiasts or devotees to a particular interest or activity.

Recourse

The legal right to demand compensation or redress, typically in a financial context, like seeking recourse for a defaulted loan.

Down Payment

An initial payment made when something is bought on credit, representing a fraction of the full purchase price.

Scope of Authority

The range or limits of the powers and responsibilities legally granted to a person or organization.