A Bank Has Excess Reserves of $6,000 and Demand Deposit

question 177

Multiple Choice

A bank has excess reserves of $6,000 and demand deposit liabilities of $100,000 when the required reserve ratio is 20 percent. If the reserve ratio is raised to 25 percent,the bank's excess reserves will be

• A)-$5,000.
• B)-$1,000.
• C)$1,000.
• D)$5,000.

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Definitions:

Polynomial

An algebraic expression made up of terms, each consisting of a variable raised to a non-negative integer power, combined using addition or subtraction.

Grouping

The process of organizing objects or numbers into sets or categories based on shared properties.

Area Model

An area model is a visual representation that uses rectangles to depict the multiplication of large numbers or algebraic expressions, aiding in the understanding of complex concepts.

Common Binomial Factor

A binomial that is a factor common to two or more polynomials.