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:

Distressed

Experiencing anxiety, sorrow, or pain; often used to describe situations, individuals, or assets under severe stress.

Peripheral Vision

That portion of vision that occurs outside the very center of gaze, allowing humans to detect movement and shapes not in the direct line of sight.

Sclera

The white or sclerotic outer coat of the eye.

Musculature

The system of muscles within the body, contributing to physical strength, movement, and posture.