Suppose a Bank Has $100 Million in Checking Account Deposits

question 197

Multiple Choice

Suppose a bank has $100 million in checking account deposits with no excess reserves and the required reserve ratio is 20 percent.If the Federal Reserve reduces the required reserve ratio to 15 percent,then the bank will now have excess reserves of

• A)$0.
• B)$5 million.
• C)$15 million.
• D)$20 million.

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Definitions:

Impulse Direction

Refers to the path that an electrical impulse follows, especially within the nervous system.

Dendrite

Of a neuron, a cytoplasmic extension that receives chemical signals sent by other neurons.

Axon

Of a neuron, a cytoplasmic extension that transmits electrical signals along its length and secretes chemical signals at its endings.

Spinal Cord

Central nervous system organ that extends through the backbone and connects peripheral nerves with the brain.