Suppose That a Bank with No Excess Reserves Receives a Deposit

question 63

Multiple Choice

Suppose that a bank with no excess reserves receives a deposit into a checking account of $10,000 in currency. If the required reserve ratio is 0.20, what is the maximum amount that the bank can lend out?

• A)$2000
• B)$8000
• C)$10,000
• D)$50,000

---

Definitions:

Chromosomes

Thread-like structures located inside the nucleus of animal and plant cells, made of protein and a single molecule of deoxyribonucleic acid (DNA), carrying genetic information.

Gene Code

Refers to the sequences of nucleotides in DNA or RNA that determine the specific amino acid sequence in the synthesis of proteins, essential for the functioning and development of an organism.

Proteins

Large molecules essential for the structure, function, and regulation of the body's tissues and organs, made up of amino acids.

Nucleus

The central part of an atom containing protons and neutrons, or a membrane-enclosed organelle found in eukaryotic cells that contains the genetic material.