Suppose the Required Reserve Ratio Is 10

question 73

Multiple Choice

Suppose the required reserve ratio is 10%. If a bank has total reserves of $80,000 and checkable deposits of $550,000, what is the amount of the bank's required reserves?

• A) $25,000
• B) $55,000
• C) $80,000
• D) $135,000

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Definitions:

Product Liability

The legal responsibility that manufacturers or sellers have to compensate for harm caused by defective or dangerous products.

Tort Law

A segment of law that addresses, rectifies, and provides remedies for civil wrongs not arising out of contractual obligations.

Privity of Contract

The relationship between parties in a contract that confers rights and obligations.

Individual

Referring to a single human being as distinct from a group, class, or family.