If the Desired Reserve Ratio Is 3 Per Cent and Deposits

question 41

Multiple Choice

If the desired reserve ratio is 3 per cent and deposits totalled $575 billion, banks would hold

• A)$17.25 billion in reserves.
• B)$17.25 billion in excess reserves.
• C)$557.75 billion in reserves.
• D)$1,725 billion in currency.

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Definitions:

Contributions

The act of giving or providing resources, effort, or information for a common purpose or benefit.

Inducements

are incentives or rewards offered to persuade someone to take a certain action or make a specific decision.

Fundamental Attribution Error

The tendency to overemphasize personal characteristics and underestimate situational factors when explaining others' behaviors.

Self-serving Bias

A cognitive bias leading individuals to attribute their successes to internal factors while blaming external factors for their failures.