Assume That a Banking System Must Keep Reserves of 20

question 68

Multiple Choice

Assume that a banking system must keep reserves of 20% against deposits. The bank receives a primary deposit of $20,000. What would be the maximum amount of loan that could be made by the system?

• A) $16,000
• B) $40,000
• C) $80,000
• D) $100,000

---

Definitions:

Specific Goals

Clearly defined, measurable, achievable, relevant, and time-bound objectives that individuals or organizations aim to accomplish.

Cost Leadership Strategy

A business strategy aimed at becoming the lowest cost producer in an industry, often leading to competitive pricing.

Rivals

Individuals, teams, or entities competing against each other, striving for the same objective or superiority in the same field.

Global Integration

The process of interconnecting the world's economies, cultures, and populations through cross-border trade and communication.