If the Required Reserve Ratio Is 10 Percent and a Bank

question 42

Multiple Choice

If the required reserve ratio is 10 percent and a bank receives a deposit of $1,000, how much may the bank loan out?

• A)$100
• B)$200
• C)$900
• D)$300

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Definitions:

Import

Items or services imported from one nation to another for the purpose of selling.

Adam Smith

An 18th-century Scottish economist and philosopher regarded as the father of modern economics, known for his work on free markets and the division of labor.

Cost More

Refers to an increase in the price or expense required to purchase or produce something compared to a previous period.

World Trade Organization

An international organization designed to supervise and liberalize world trade, by providing a forum for negotiating trade agreements and a dispute resolution process.