A Bank Has Excess Reserves of $6,000 and Demand Deposit

question 177

Multiple Choice

A bank has excess reserves of $6,000 and demand deposit liabilities of $100,000 when the required reserve ratio is 20 percent. If the reserve ratio is raised to 25 percent,the bank's excess reserves will be

• A)-$5,000.
• B)-$1,000.
• C)$1,000.
• D)$5,000.

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Definitions:

Opiate Drugs

Substances derived from the opium poppy that are used for their pain-relieving properties but may lead to addiction.

Receptor Sites

Specific locations on the surface of a cell or within its interior where chemical compounds, such as hormones or neurotransmitters, can bind to trigger a response in the cell.

Endorphins

Neurochemicals produced in the brain that act as natural painkillers and are associated with feelings of pleasure and euphoria.

Relieve Pain

The process or action of reducing, alleviating, or eliminating physical discomfort or suffering.