Suppose a Bank Has $200,000 in Deposits and a Required

question 130

Multiple Choice

Suppose a bank has $200,000 in deposits and a required reserve ratio of 15 percent.Then required reserves are

• A)$3,000.
• B)$1,333,333.
• C)$3,000,000.
• D)$30,000.

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Definitions:

Variable Costs

Expenses that change in proportion to the activity of a business, such as the cost of raw materials or production volume.

Total Revenue

The amount of money generated from sales of goods or services before any expenses are subtracted.

Variable Costs

Costs that change in proportion to the level of production or sales activities of a business.

Fixed Costs

Business expenses that remain constant regardless of the level of goods or services produced.