For the Following Seven Questions, Use the Following Bank Balance

question 40

Multiple Choice

For the following seven questions, use the following bank balance sheet. Values are millions of dollars.

-If $100 in transaction deposits were withdrawn, what is the minimum amount the bank would have to borrow to meet the reserve requirement, if there were no other changes to the balance sheet?

• A) $30
• B) $50
• C) $80
• D) $100

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Definitions:

Retained Earnings

Retained earnings are the portion of a company's profits that are kept or retained within the company for reinvestment in business operations, rather than being paid out as dividends to shareholders.

Retained Earnings

The portion of a company’s profits that is kept or retained and not paid out as dividends to shareholders, often used for reinvestment.

Cumulative Net Income

The total amount of net income earned by a company over a specified period, typically since its inception.

Dividends Declared

The announcement by a company's board of directors of the issuance of dividends to shareholders.