Suppose a Bank Is Exactly Meeting Its Desired Reserve Ratio

question 257

Multiple Choice

Suppose a bank is exactly meeting its desired reserve ratio of 10 percent and a new deposit of $75,000 is made. Immediately after the deposit is made, the bank's unplanned reserves equal

• A) zero.
• B) $7,500.
• C) $67,500.
• D) It is impossible to determine without additional information.

---

Definitions:

Drill Bits

Cutting tools used to remove material to create holes, almost always of circular cross-section.

Taper Ratio

The ratio describing how much a tapered feature reduces in diameter over a specified length.

Taper Angle

The angle at which a tapered feature decreases in diameter from one part to another.

Undercut

A notch or small cut made in the part of an object, usually to provide clearance or space for other components.