A Bank Has $100,000 in Checkable Deposits and $30,000 in Reserves

question 100

Multiple Choice

A bank has $100,000 in checkable deposits and $30,000 in reserves. If the required reserve ratio is 20%, what is the maximum amount of loans this bank can create?

• A) $0
• B) $10,000
• C) $20,000
• D) $30,000

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Definitions:

Happiness

A state of well-being characterized by emotions ranging from contentment to intense joy.

Interaction Effect

The effect that arises when the impact of one independent variable on the dependent variable depends on the level of another independent variable.

Independent Variable

A variable that is manipulated or changed in an experiment to test its effects on the dependent variable.

Dependent Variable

The variable in an experiment that is expected to change in response to manipulations of the independent variable.