If the Desired Reserve Ratio Is 10 Percent, How Much

question 88

Multiple Choice

If the desired reserve ratio is 10 percent, how much excess reserves does a bank acquire when a business deposits a $500 cheque drawn on another bank?

• A)$450
• B)$550
• C)$5000
• D)$500

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Definitions:

Entity Mind-Set

The belief that personal qualities are fixed and cannot be changed significantly over time, as opposed to a growth mindset which sees abilities as malleable.

Correspondent Inference

The process of drawing inferences about a person's disposition, traits, or personality based on observed behavior.

External Factor

Elements outside of an individual's control that influence their behavior, decisions, or outcomes.

Social Role

The part an individual plays in a given social context, characterized by expected behaviors, responsibilities, and norms attributed to their position.