If a Bank Has a Required Reserve Ratio of 25

question 84

Multiple Choice

If a bank has a required reserve ratio of 25 percent and there is $10,000 in deposits,what is the maximum amount of loans that can be made by this bank?

• A) $40,000
• B) $10,000
• C) $0
• D) $2,500
• E) $7,500

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Definitions:

Nonserious Interference

Minimal or insignificant disruption that does not constitute a legal nuisance or cause substantial harm to another's property rights.

Conversion

Conversion, in legal terms, refers to an act of wrongfully taking, using, or retaining possession of personal property belonging to another without permission.

Real Property

Land and anything permanently attached to it, such as buildings and other structures.

Personal Property

Movable property that is not classified as real estate, including tangible items like cars and furniture, and intangible items such as stocks and bonds.