If a Bank Has $100,000 of Checkable Deposits,a Required Reserve

question 96

Multiple Choice

If a bank has $100,000 of checkable deposits,a required reserve ratio of 20 percent,and it holds $40,000 in reserves,then the maximum deposit outflow it can sustain without altering its balance sheet is

• A)$30,000.
• B)$25,000.
• C)$20,000.
• D)$10,000.

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Definitions:

Level Of Significance

The probability of rejecting the null hypothesis in a statistical test when it is actually true, often denoted by alpha.

Null Hypothesis

A statistical hypothesis that suggests there is no significant effect or difference between certain data sets or variables.

One-Tail T-Test

A statistical hypothesis test used to determine if there is a significant difference in the means of two groups in one direction.

Level Of Significance

The level of significance, often denoted by alpha, is a threshold set for deciding whether to reject the null hypothesis, typically set at values like 0.05 or 0.01.