If a Bank Has Excess Reserves of $15,000 and Demand

question 171

Multiple Choice

If a bank has excess reserves of $15,000 and demand deposit liabilities of $80,000,and if the reserve requirement is 20 percent,then the bank has total reserves of

• A)$11,000.
• B)$21,000.
• C)$31,000.
• D)$41,000.

---

Definitions:

Regressive Tax

A tax that takes a smaller share of the income of high-income taxpayers than of low-income taxpayers.

Progressive Tax

A tax that takes a larger share of the income of high-income taxpayers than of low-income taxpayers.

Benefits Principle

The principle of tax fairness by which those who benefit from public spending should bear the burden of the tax that pays for that spending.

Federal Tax

Taxes levied by the national government on income, sales, property, and other activities.