If the Reserve Requirement Is 10 Percent, What Amount of Excess

question 78

Multiple Choice

If the reserve requirement is 10 percent, what amount of excess reserves does a bank acquire when a business deposits a $500 check drawn on another bank?

• A) $450
• B) $400
• C) $5,000
• D) $550

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Definitions:

Sale

A transaction between a buyer and a seller in which money is exchanged for goods or services.

Asset

Resources owned or controlled by a business or individual that are expected to bring future benefits.

Cash Received

Represents the total amount of money received by a company during a specific period, including all sources of cash income.

Capital Expenditures

Capital expenditures are funds used by a company to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment.