A Bank's Checkable Deposits Shrink from $40 Million to $33

question 183

Multiple Choice

A bank's checkable deposits shrink from $40 million to $33 million. What happens to its required reserves if the required reserve ratio is 3 percent?

• A) They fall by about $1.2 million.
• B) They fall by about $10 million.
• C) They fall by about $7 million.
• D) They fall by about $0.2 million.

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Definitions:

Agricultural Societies

Communities whose economies are based on producing and maintaining crops and farmland.

Social Distance

The perceived or desired level of emotional or physical space between individuals or within social groups.

Intercultural Contact

Interaction between individuals from different cultures, leading to an exchange of values, ideas, and traditions.

Relative Deprivation

The experience of feeling deprived of something to which one believes they are entitled, compared to others or their own expectations.