Suppose the Required Reserve Ratio Is 10

question 125

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 excess reserves?

• A) $25,000
• B) $55,000
• C) $80,000
• D) $250,000

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Definitions:

Association Power

The influence or impact derived from being part of or connected to a certain group, organization, or network.

Connection Power

The influence one possesses due to their network and relationships, facilitating the ability to leverage social ties for resources or information.

Reciprocal Alliances

Partnerships or agreements between two or more parties that involve mutual benefits or exchanges.

Reciprocity

The practice of exchanging things with others for mutual benefit, especially privileges granted by one country or organization to another.