If the Desired Reserve Ratio Is 3 Percent and Deposits

question 82

Multiple Choice

If the desired reserve ratio is 3 percent and deposits totaled $5.75 billion, banks hold

• A)$172.5 million in reserves.
• B)$0.1725 million in reserves.
• C)$172.5 million in excess reserves.
• D)$0.1725 million in excess reserves.
• E)$192 million in reserves.

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Definitions:

Restricting Competition

Practices or agreements that limit free competition in the marketplace, often scrutinized under antitrust or competition laws.

Void

A term describing a contract or legal agreement that is null, having no legal force or effect, and therefore unenforceable.

Significant Sums

Large amounts of money that are considerable in quantity or effect.

Enforceable

Capable of being imposed or executed as per legal guidelines or by authority.