Suppose a Bank Has $100 Million in Checking Account Deposits

question 81

Multiple Choice

Suppose a bank has $100 million in checking account deposits with no excess reserves and the required reserve ratio is 10 percent.If the Federal Reserve reduces the required reserve ratio to 4 percent,then the bank can make a maximum loan of

• A)$0.
• B)$4 million.
• C)$6 million.
• D)$10 million.

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Definitions:

Self-Concept

An individual's comprehensive understanding and perception of themselves, encompassing beliefs, feelings, and knowledge about one’s abilities, appearance, and personality.

Self-Worth

The sense of one's own value or worth as a person; self-esteem.

Strong Belief

A deeply held conviction or opinion that significantly influences one's thoughts and actions.

Self-Esteem

The subjective evaluation of one's own worth, encompassing beliefs about oneself as well as an emotional state.