Suppose That Banks Desire to Hold No Excess Reserves the Reserve

question 75

Multiple Choice

Suppose that banks desire to hold no excess reserves the reserve ratio is 5 percent and a bank receives a new deposit of $1,000.This bank

• A)will increase its required reserves by $50.
• B)will initially see its total reserves increase by $1,000.
• C)will be able to make a new loan of $950.
• D)All of the above are correct.

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Definitions:

Strategies

Plans of action designed to achieve a long-term or overall aim.

Goal

In learning and cognitive approaches to personality, a desired end state that serves to direct perception, thought, and behavior.

Power Motivation

The drive to influence others or seek positions of authority and control, regarded as a fundamental aspect of human behavior.

McClelland's View

A psychological theory proposed by David McClelland that emphasizes the importance of three needs—achievement, affiliation, and power—in influencing human motivation.