The Following Question Refer to the Table That Follows

question 40

Multiple Choice

The following question refer to the table that follows. Assume that there is a fractional-reserve banking system, that the legal reserve requirements are 10 percent, and that the balance sheet for Bank X is as follows:

-Bank X can safely increase its loans and investment by the amount of

• A) $5,000,000.
• B) $3,000,000.
• C) $2,000,000.
• D) $1,667,000.
• E) $1,000,000.

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Definitions:

Discouraged Workers

Individuals who are not actively seeking work because they believe no jobs are available for them or there are no jobs for which they would qualify.

United States

A country in North America consisting of 50 states, characterized by a diverse geography, culture, and economy.

Structural Unemployment

Structural unemployment occurs when there is a mismatch between the skills workers possess and the skills needed by employers, often due to technological changes or shifts in the economy.

Marketable Skills

Abilities or proficiencies that are in demand by employers and can be utilized for economic gain.