Assume That a Bank Initially Has No Excess Reserves

question 113

Multiple Choice

Assume that a bank initially has no excess reserves.If it receives $5,000 in cash from a depositor and the bank finds that it can safely lend out $4,500, the reserve requirement must be

• A)zero.
• B)10 percent.
• C)20 percent.
• D)25 percent.

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Definitions:

Illusion of Unanimity

A phenomenon occurring in group decision-making processes where a false agreement is perceived, due to members withholding their dissenting views.

Low Cohesiveness

Refers to a situation within a group or team where there is little or no sense of belonging among members, often resulting in a lack of collaboration and unity.

Conformity

Describes the act of matching attitudes, beliefs, and behaviors to group norms, policies, or societal expectations.

Group Survival

The ability of a collective to endure or overcome challenges and threats together, ensuring the longevity and stability of the group.