If a Bank That Is Subject to a 10 Percent

question 167

Multiple Choice

If a bank that is subject to a 10 percent required reserve ratio has $20,000 in excess reserves, it can make new loans of:

• A) $2,000.
• B) $18,000.
• C) $20,000.
• D) $200,000.

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Definitions:

John Quincy Adams

John Quincy Adams was the sixth President of the United States, serving from 1825 to 1829, and was known for his strong opposition to slavery and his role in the Amistad case.

White House

The formal dwelling and office of the United States President, positioned at 1600 Pennsylvania Avenue NW, Washington, D.C.

1824

The year marked by the United States presidential election, which was ultimately decided in the House of Representatives, leading to John Quincy Adams’ presidency.

American System

An economic plan that played a prominent role in American policy during the first half of the 19th century, rooted in the belief in protectionism, a national bank, and internal improvements (such as roads and canals) to foster commerce and strengthen the nation.