If a Bank Holds $2000 in Demand Deposits and the Required

question 114

Multiple Choice

If a bank holds $2000 in demand deposits and the required reserve ratio is 0.15,how much can the bank lend out?

• A) $2,000
• B) $1,700
• C) $300
• D) $150
• E) $2,300

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Definitions:

Tropical Rain Forest

A dense, warm, wet forest biome found near the equator, known for its high biodiversity and complex ecosystem.

Savanna

A tropical grassland containing scattered trees; found in areas of low rainfall or seasonal rainfall with prolonged dry periods.

Tundra

(tundra) A treeless biome between the boreal forest in the south and the polar ice cap in the north that consists of boggy plains covered by lichens and small plants. Also called arctic tundra. Compare with alpine tundra.

Temperate Desert

A type of desert found in temperate climates, characterized by relatively low temperatures compared to tropical deserts.