A Bank Has Excess Reserves of $4,000 and Demand Deposits

question 141

Multiple Choice

A bank has excess reserves of $4,000 and demand deposits of $40,000; the reserve requirement is 20%. If the reserve requirement is increased to 25%, the maximum amount of new loans this bank can make is

• A) $1,500.
• B) $2,000.
• C) $2,500.
• D) $3,000.

---

Definitions:

Smegma

A substance composed of dead skin cells and oils, which can accumulate in genital areas, such as under the foreskin in males and around the clitoral hood in females.

Foreskin

The retractable roll of skin covering the end of the penis.

Refractory Period

The time period following an orgasm during which an individual is unable to achieve another orgasm.

Ejaculation

The release of semen from the penis during sexual climax.