What Happens When You Withdraw Cash from a Bank

question 89

Multiple Choice

What happens when you withdraw cash from a bank?

• A) The bank's reserves are reduced.
• B) The bank's reserves are increased.
• C) The bank's reserves are not affected.
• D) The bank's total reserves remain unchanged but the composition of required reserves and excess reserves change.

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Definitions:

Standard Deviation

A statistical measure of the dispersion or variability of a set of numbers, indicating how spread out the numbers are from the mean.

Expected Return

The weighted average of all possible returns from an investment, where each return is weighted by its probability of occurring.

Real Estate Project

An initiative involving the purchase, improvement, management, or sale of property assets for the purpose of generating profits or revenue.

Risk-Free Asset

An investment that is expected to return its original value without any loss, theoretically free from default risk.