Suppose a Bank Has $200,000 in Deposits,a Required Reserve Ratio

question 62

Multiple Choice

Suppose a bank has $200,000 in deposits,a required reserve ratio of 15 percent,and total reserves of $100,000.Then it has excess reserves of

• A)$70,000.
• B)$30,000.
• C)Negative $100,000.
• D)$200,000.

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Definitions:

Excise Tax

A tax on the sale of specific goods or services, often included in the price of the product.

Hamburgers

A popular food item consisting of a cooked patty of ground meat, usually beef, placed inside a sliced bread roll or bun.

Deadweight Loss

A loss in economic efficiency that occurs when the equilibrium outcome is not achievable or is not achieved.

Elastic

A characteristic of a good or service that indicates its sensitivity to changes in price, with relatively large changes in quantity demanded or supplied in response to price changes.