Suppose a Bank Has a Desired Reserve Ratio of 12

question 84

Multiple Choice

Suppose a bank has a desired reserve ratio of 12 per cent. If someone deposits $1,000 in the bank,

• A)immediately after the deposit, excess reserves increase by $880.
• B)the bank's desired reserves rise by $1,000.
• C)the bank can make loans of $1,000.
• D)Both answers B and C are correct.

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Definitions:

Tibialis Posterior

A muscle in the leg that supports the arch of the foot and aids in walking by controlling plantar flexion and inversion of the foot.

Fibularis Brevis

A muscle of the lower leg that contributes to the eversion and plantarflexion of the foot.

Extensor Hallucis Longus

A leg muscle that extends the big toe and aids in foot dorsiflexion and inversion.

Tibialis Anterior

A muscle in the lower leg that contributes to dorsiflexion and inversion of the foot.