$\text { Assets }\quad\quad\quad\quad\quad\quad\quad \text { Liabilities }$ -The Table Above Shows the Balance Sheet for Ralph?s Bank

question 47

Multiple Choice

$\text { Assets }\quad\quad\quad\quad\quad\quad\quad \text { Liabilities }$
$\begin{array}{|lc|lc|}\hline \text { Reserves } & \$ 500 &\text { Deposits }&\$5,000\\\text { Loans }&\$2,500\\\text { Total } & \$ 1,000&\text { Total }&\$3,000 \\\hline\end{array}$
-The table above shows the balance sheet for Ralph?s Bank. If the desired reserve ratio is 15 percent, Ralph?s Bank has desired reserves of ___________.

• A) $450
• B) $3,000
• C) $2,500
• D) $500

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Definitions:

Overhead

All ongoing business expenses not directly attributable to creating a product or service, including rent, utilities, and administrative costs.

Losing Money

The result of an investment or business activity where expenses and losses exceed revenues or gains.

Profitable

Being profitable means that a company or business generates more revenue than the costs involved in its operation, resulting in a positive financial gain.

Friendly Merger

A merger agreed upon by all parties involved, where the companies willingly combine due to perceived mutual benefits.