-Refer to Table 13

question 38

Multiple Choice

-Refer to Table 13.4. First Charter Bank could still make additional loans of $40,000 if the required reserve ratio were:

• A) 5%.
• B) 2.5%.
• C) 10%.
• D) 8%.

---

Definitions:

Fixedness

A cognitive bias that limits a person to using an object only in the way it is traditionally used.

Heuristics

Mental shortcuts or rules of thumb that simplify decision making and problem solving, although not always perfectly accurate.

Creativity

The ability to produce original and unusual ideas, or to make something new or imaginative.

Sunk-Cost Fallacy

A cognitive error where past investments of time, effort, or money are taken into account when making a decision, even though they cannot be recovered.