The Accompanying Table Gives Data for a Commercial Bank or
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question 165

Multiple Choice

$$\begin{array} { | c | c | c | } \hline \text { (1) } & ( 2 ) & ( 3 ) \\\hline \text { Legal Reserve Ratio (\%) } & \text { Checkable Deposits } & \text { Actual Reserves } \\\hline 10 & \$ 40,000 & \$ 10,000 \\\hline 20 & 40,000 & 10,000 \\\hline 25 & 40,000 & 10,000 \\\hline 30 & 40,000 & 10,000 \\\hline\end{array}$$ The accompanying table gives data for a commercial bank or thrift. If the legal reserve ratio falls from 25 percent to 10 percent, excess reserves of this single bank will

• A) rise by $6,000 and the monetary multiplier will increase from 4 to 10.
• B) rise by $60,000 and the monetary multiplier will increase from 4 to 10.
• C) fall by $6,000 and the monetary multiplier will decline from 30 to 10.
• D) fall by $2,000 and the monetary multiplier will decline from 10 to 4.

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Definitions:

False Alarms

Instances where an anticipated negative outcome or threat is signaled but does not actually materialize.

Pattern Theory

suggests that sensory information is represented in the brain as patterns of neural firing, which are recognized and interpreted based on learned experiences.

Sensory Qualities

Characteristics of objects or events that are perceived by the senses, such as taste, smell, sound, touch, and sight.

Activation

In psychology, it often refers to the arousal level or the state of being prepared to act, which can be triggered by various stimuli or internal processes.