Suppose a Bank Has $6,000 in Checkable Deposits and the Required

question 126

Multiple Choice

Suppose a bank has $6,000 in checkable deposits and the required reserve ratio is 0.2.If the bank wishes to hold no excess reserves,its actual reserves will be:

• A)$4,000.
• B)$1,200.
• C)$3,000.
• D)less than $1,000.
• E)$4,800.

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Definitions:

Corporation

A corporation is a legal entity separate from its owners, offering limited liability protection, and has the ability to raise capital through the issuance of shares.

Business Organization

The structure and form that a business takes to conduct operations, ranging from sole proprietorships to corporations.

Privately Held Corporation

A company whose ownership is private, meaning its stock is not traded on public stock exchanges and is held by a limited group of shareholders.

New York Stock Exchange

A marketplace where securities, including stocks and bonds, are bought and sold.