If a Bank That Faces a 10 Percent Reserve Ratio

question 147

Multiple Choice

If a bank that faces a 10 percent reserve ratio received a deposit of $50,000 and makes a loan to a customer for $5,000,what is the consequence if the bank then deposits the rest of the funds at the Federal Reserve?

• A) Excess reserves increase by $50,000.
• B) Excess reserves increase by $45,000 and required reserves increase by $5,000.
• C) Excess reserves increase by $5,000 and required reserves increase by $45,000.
• D) Excess reserves increase by $40,000 and required reserves increase by $5,000.
• E) Reserves are not affected.

Distinguish between federal preemption and state authority in areas of concurrent jurisdiction.

Grasp the constitutional protections afforded to commercial speech and understand its limits.

Understand the criteria and implications of the Equal Protection Clause, particularly regarding suspect classifications and the rational basis test.

Glean the importance and procedures required by the Due Process Clause in government actions.

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Definitions:

Employee Leasing

A practice where businesses hire their workers through a professional employer organization, which then handles HR, payroll, and other administrative tasks.

Labour Costs

The total expenses incurred by employers for the payment of wages, benefits, and other forms of compensation to employees.

Labour Costs

Financial expenditures related to employing workers, including wages, benefits, taxes, and training expenses.

In-house Consultant

An employee within an organization who provides expert advice and services in a particular area, similar to an external consultant but employed internally.