Given the Following Information About Metropolis Bank

question 124

Multiple Choice

Given the following information about Metropolis Bank:
Bank Deposits $50,000
Loans 17,500
Required Reserves 30,000
Excess Reserves 2,500
The required reserve ratio must be

• A) 75 percent.
• B) 60 percent.
• C) 30 percent.
• D) 15 percent.

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Definitions:

Economic Freedom

The degree to which individuals and businesses can make economic decisions without government intervention.

Central Planning

A system where the government or a centralized authority makes all decisions about the production and distribution of goods and services.

Industry Output

The total production of goods and services by all firms in a particular industry over a specific time period.

Chain Reaction

A sequence of reactions where a reactive product or by-product causes additional reactions to take place, often leading to a self-sustaining series of events.