If a Bank with a Required Reserve Ratio of 15

question 165

Multiple Choice

If a bank with a required reserve ratio of 15 percent receives a deposit of $600, it now has a

• A)$600 increase in excess reserves and no increase in required reserves.
• B)$600 increase in required reserves and no increase in excess reserves.
• C)$510 increase in excess reserves and a $90 increase in required reserves.
• D)$90 increase in excess reserves and a $510 increase in required reserves.

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Definitions:

Firm's Assets

The economic resources owned by a business, including cash, property, equipment, and intellectual property, which are used to generate revenue.

Stock Split

A business procedure in which a corporation splits its current shares into more shares to increase the shares' marketability.

Round Lot

A standardized number of units of an asset or security, usually used as the normal trading unit in the stock market.

Clientele

Refers to the base of customers or clients who regularly do business with an establishment or who are served by an organization, professional, or agency.