The Following Are Simplified Consolidated Balance Sheets for the Chartered

question 171

Multiple Choice

The following are simplified consolidated balance sheets for the chartered banking system and the Bank of Canada.Do not cumulate your answers; that is, do return to the data given in the original balance sheets in answering each question.Assume a desired reserve ratio of 5 percent for the chartered banks.All figures are in billions of dollars.CONSOLIDATED BALANCE SHEET: CHARTERED BANKING SYSTEM BALANCE SHEET: BANK OF CANADA
Refer to the above information.The chartered banks have excess reserves of:

• A)$1
• B)$6
• C)$20
• D)$0

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Definitions:

Reverse Fault

A reverse fault is a type of geological fault where the hanging wall moves upward relative to the footwall, typically occurring in areas of compression like the boundaries of convergent tectonic plates.

Thrust Fault

A type of fault in which one rock stratum is pushed up and over another due to compressional forces.

Hypocenter

The point within the Earth where a seismic rupture starts, commonly known as the focus of an earthquake.

Epicenter

The point on Earth’s surface directly above where an earthquake occurs (directly above the focus or hypocenter).