If Actual Reserves in the Banking System Are $40,000, Excess

question 48

Multiple Choice

If actual reserves in the banking system are $40,000, excess reserves are $10,000, and checkable deposits are $240,000, then the legal reserve requirement is

• A) 10 percent.
• B) 12.5 percent.
• C) 20 percent.
• D) 5 percent.

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Definitions:

Napoleon III

Nephew of Napoleon Bonaparte who became the Emperor of France (1852-1870), known for his expansionist policies and the modernization of the French economy.

Armistice

An agreement made by opposing sides in a conflict to stop fighting for a certain period, a truce often preceding a formal peace treaty.

Austria

A landlocked country in Central Europe, known for its cultural heritage, historical significance, and alpine landscapes.

Otto Von Bismarck

A Prussian statesman who engineered the unification of Germany in 1871 and served as its first Chancellor.