Table 131 Assume That This Is the Balance Sheet of the Only

question 66

Multiple Choice

Table 13.1
$\begin{array}{c}\text { Balance Sheet }\\\quad\quad\quad\text { Assets } \quad\quad\quad\quad\quad\quad\quad\quad \text { Liabilities }\\\begin{array}{|c|c|c|c|}\hline\text { Vault Cash } & \$ 1,150 & \begin{array}{c}\text { Checking } \\\text { Accounts }\end{array} & \$ 11,300 \\\hline \begin{array}{c}\text { Reserve } \\\text { Deposits }\end{array} & \$ 1,650 & \text { Savings Accounts } & \$ 3,200 \\\hline \text { Loans } & \$ 11,700 & & \\\hline \text { Total Assets } & \$ 14,500 & \text { Total Liabilities } & \$ 14,500\\\hline\end{array}\end{array}$

Assume that this is the balance sheet of the only bank in this economy and that the money supply is entirely kept by the bank in either a checking or a savings account.
-Refer to Table 13.1. Given a reserve requirement of 8 percent, what is the increase in required reserves when the government purchases $400 worth of government securities?

• A) $400
• B) $224
• C) $32
• D) $256
• E) $5,000

Comprehend the differences between intuitive and analytic thought, and their respective influences on decision-making.

Grasp the notion of dual-processing in the human brain and its implications for emotional and analytical processing.

Understand the role of age and education in the development of logical thinking and analytical capabilities.

Understand the primary challenges and tasks of adolescence.

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Definitions:

Diversified

The strategy of spreading investments across various financial assets to reduce risk and increase the potential for return.

Open-end Investment Companies

Mutual funds that continuously issue new shares or redeem existing shares at the net asset value.

Mutual Funds

Funds that aggregate capital from numerous investors to acquire a varied collection of shares, bonds, or alternative financial instruments.

12b-1 Fee

A fee found in the expense ratio of some mutual funds, meant to cover marketing, distribution, and other costs.