If the Required Reserve Ratio Is 10 Percent and a Bank

question 141

Multiple Choice

If the required reserve ratio is 10 percent and a bank receives a new deposit for $100,000,then the:

• A)bank must keep $5,000 in excess reserves.
• B)bank's required reserves increase by $45,000.
• C)bank's liabilities increase by $100,000.
• D)bank can increase its loans by up to $50,000.
• E)bank can increase its loans by up to $400,000.

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Definitions:

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A postural deviation where there is an excessive inward curvature of the lower back, leading to a protruding abdomen and a slumped posture.

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A vein located in the neck that returns blood from the head to the heart.

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Abnormal black, sticky stool containing digested blood that is indicative of gastrointestinal bleeding.

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Feces that have a dark, tar-like appearance, typically indicative of bleeding in the upper gastrointestinal tract.