(Table) SCENARIO: Assume That Empathy State Bank Begins with the Balance

question 87

Multiple Choice

(Table) SCENARIO: Assume that Empathy State Bank begins with the balance sheet shown and is not fully loaned-up. If this bank is subject to a reserve requirement of 5%, how much more can it loan out if it wants to be fully loaned-up?

• A) $2,500
• B) $5,000
• C) $10,000
• D) Nothing. This bank is already fully loaned-up.

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Definitions:

Acceptance

Acceptance refers to the act of receiving or taking something offered or recognizing a situation or condition as valid or correct without attempting to change it, often implying agreement or consent.

Manipulation

The act of controlling or influencing a person or situation cunningly or unfairly.

Endorphins

Neurotransmitters produced in the brain that act as natural painkillers and are also associated with feelings of pleasure and euphoria.

Physical Benefits

Positive effects or improvements to the body’s health and functioning resulting from physical activity, proper nutrition, or other health behaviors.