A Bank Has $200 of Reserves and $4,000 of Deposits

question 27

Multiple Choice

A bank has $200 of reserves and $4,000 of deposits. It is just meeting its desired reserves and has no excess reserves. Thus the desired reserve ratio is

• A)$200.
• B)25 percent.
• C)20 percent.
• D)10 percent.
• E)5 percent.

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Definitions:

Liver

A large vital organ in the body involved in many processes, including detoxification, protein synthesis, and production of biochemicals necessary for digestion.

Nutrients

Substances that provide nourishment essential for the growth and maintenance of life.

Cheilosis

A condition characterized by cracking and inflammation of the lips, corners of the mouth, often due to vitamin deficiency or infection.

Abdomen

The part of the body that lies between the thorax (chest) and pelvis, housing many vital organs, including the stomach, liver, and intestines.