If a Bank Has a Required Reserve Ratio of 30

question 87

Multiple Choice

If a bank has a required reserve ratio of 30 percent,excess reserves of $45,000,000,and deposits of $100,000,000,how much can the bank lend out?

• A) $13,500,000
• B) $30,000,000
• C) $43,500,000
• D) $45,000,000
• E) $145,000,000

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Definitions:

Economic Life

The duration during which an asset remains useful to the owner or is expected to generate economic benefits.

Gross Receivable

The total amount owed to a company for goods sold or services rendered before any deductions for returns or allowances.

Executory Costs

Expenses arising from operational agreements, such as leases, which are not yet settled.

Periodic Lease Rental Payments

Regular payments made by a lessee to a lessor for the use of property, equipment, or vehicles, typically established under a lease agreement.