A Bank Has $100,000 in Checkable Deposits and $30,000 in Reserves

question 100

Multiple Choice

A bank has $100,000 in checkable deposits and $30,000 in reserves. If the required reserve ratio is 20%, what is the maximum amount of loans this bank can create?

• A) $0
• B) $10,000
• C) $20,000
• D) $30,000

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Definitions:

Competitive Inhibitors

Substances that bind to the active site of an enzyme, competing with the substrate and thus inhibiting enzyme activity.

Chemical Energy

The potential of a chemical substance to undergo a transformation through a chemical reaction, resulting in the release of energy.

Kinetic Energy

The energy that a body possesses due to its motion, dependent on the mass of the body and the square of its velocity.

Allosteric Site

A site on an enzyme other than the active site, to which a specific substance binds, thereby changing the shape and activity of the enzyme. Compare with active site.