Suppose Total Deposits in the First Bank of Commerce Are

question 50

Multiple Choice

Suppose total deposits in the First Bank of Commerce are $200,000 and required reserves are $10,000. Based on this information, the required reserve ratio is:

• A)0.05.
• B)0.10.
• C)0.20.
• D)20.0.

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Definitions:

Barter Economy

An economic system where goods and services are exchanged directly for other goods and services without using money.

Command Economy

An economic system where the government or central authority makes all decisions related to the production and distribution of goods and services.

Traditional Economy

An economic system rooted in tradition, customs, and beliefs, where resources are allocated based on inheritance and bartering is common, often found in rural and farm-based areas or developing countries.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or choosing to invest resources in one option over another.