Assume That a Single Chartered Bank Has No Excess Reserves

question 87

Multiple Choice

Assume that a single chartered bank has no excess reserves and that the desired reserve ratio is 20 percent.If this bank sells a bond for $1,000 to the Bank of Canada, it can expand its loans by a maximum of:

• A)$1000
• B)$2000
• C)$200
• D)$800

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Definitions:

Enhances Diversity

Improves the variety of thought, experience, and background among a group or organization's members, contributing to innovation and inclusivity.

Effectively

In a manner that produces the intended result or a successful outcome.

False Assumption

An incorrect belief or premise that may lead to erroneous conclusions or actions.

Same Characteristics

Qualities, attributes, or features that are identical or very similar between entities.