Suppose the Reserve Requirement Is 10 Percent

question 212

Multiple Choice

Suppose the reserve requirement is 10 percent. If a bank has $5 million of checkable deposits and actual reserves of $500,000, the bank

• A) can safely lend out $500,000.
• B) can safely lend out $5 million.
• C) can safely lend out $50,000.
• D) cannot safely lend out more money.

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Definitions:

Balance Sheet Approach

A method in international human resource management that aims to equalize the purchasing power of employees working abroad to that of employees in the home country.

Expatriate Compensation

The package of salary, benefits, allowances, and incentives offered to employees who are sent to work in a foreign country by their employer.

Economic Forces

Represent the various external factors that influence the economy and affect businesses and consumers, such as inflation, interest rates, and unemployment rates.

Global Compensation Strategy

Involves designing and implementing compensation practices that are consistent worldwide while also accommodating local laws, practices, and expectations.