The Accompanying Table Gives Data for a Commercial Bank or
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question 131

Multiple Choice

$$\begin{array} { | c | c | c | } \hline \text { (1) } & \text { (2) } & \text { (3) } \\\hline \text { Legal Reserve Ratio (\%) } & \text { Checkable Deposits } & \text { Actual Reserves } \\\hline 10 & \$ 40,000 & \$ 10,000 \\\hline 20 & 40,000 & 10,000 \\\hline 25 & 40,000 & 10,000 \\\hline 30 & 40,000 & 10,000 \\\hline\end{array}$$ The accompanying table gives data for a commercial bank or thrift. When the legal reserve ratio is 30 percent, the monetary multiplier is

• A) 5.
• B) 4.
• C) 3.33.
• D) 2.5.

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Definitions:

Liquidate

The process of converting assets into cash or cash equivalents, often done in the context of winding up a business, paying off debts, or redistributing resources.

Conserve Assets

The practice of managing and protecting assets to ensure their longevity or to prevent loss.

Reorganization Cases

Legal cases that involve restructuring a company's debts and operations with the goal of returning to profitability and viability.

Commencement

The act or moment when something begins or is initiated.