If a Bank Is Subject to a Reserve Requirement of 10

question 183

Multiple Choice

If a bank is subject to a reserve requirement of 10% and if its reserve ratio is 33%, then all of the following are true EXCEPT that it:

• A) can make additional loans.
• B) has excess reserves.
• C) must limit withdrawals.
• D) is considered highly liquid.

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Definitions:

Chart of Accounts

A systematic list of all account titles and numbers being used by a company to organize its financial transactions and to prepare financial statements.