The Following Balance Sheet Is for the First National Bank

question 39

Multiple Choice

The following balance sheet is for the First National Bank.Assume the desired reserve ratio is 15 percent. Refer to the above data.If a cheque for $14,000 is drawn and cleared against this bank, its reserves and demand deposits will be, respectively:

• A)$50,000 and $120,000.
• B)$50,000 and $106,000.
• C)$36,000 and $120,000.
• D)$36,000 and $106,000.

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Definitions:

Contrary Recognition

The ability to identify and acknowledge ideas or facts that oppose personal beliefs or expectations.

Inference Rules

Set guidelines or principles used to deduce new information or conclusions from known facts or premises.

Mental Graph

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True Conditions

True conditions refer to circumstances or parameters that are in accordance with fact or reality.