If the Reserve Ratio Was 10% for the Bank with the Balance

question 28

Multiple Choice

If the reserve ratio was 10% for the bank with the balance sheet listed below, then this bank is being
$\begin{array}{c}\begin{array}{lr}\text { Assets }\\\text { Reserves } &\$ 2,500,000 \\\text { Loans Outstanding } & \$ 2,000,000 \\\hline \text { Total } & \$ 5,500,000\\\\\\\end{array}\begin{array}{lll}\text { Liabilities \& Net Worth }\\\text {Checking deposits}& \$ 5,000,000\\\\\text { Net Worth }\\\text {Stockholders' Equity}& \$ 500,000\\\hline \text { Total}& \$5,500,000 \\\end{array}\end{array}$

• A) aggressive as indicated by a small amount of excess reserves.
• B) aggressive as indicated by a large amount of excess reserves.
• C) cautious as indicated by a small amount of excess reserves.
• D) cautious as indicated by a large amount of excess reserves.

---

Definitions:

Expressive Needs

Human desires or motivations to express oneself emotionally or creatively, often through art, communication, or personal style.

Technical Skills

Abilities and knowledge needed to perform specific tasks, often relating to computational and physical technology.

Percent

A mathematical term referring to a part of a whole expressed in hundredths.

American Stores

Retail outlets or shops located in the United States that sell various goods and services.