If a Bank Has Excess Reserves of $10,000 and Demand

question 53

Multiple Choice

If a bank has excess reserves of $10,000 and demand deposit liabilities of $80,000,and if the reserve requirement is 20 percent,then the bank has actual reserves of

• A)$16,000.
• B)$20,000.
• C)$26,000.
• D)$36,000.

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Definitions:

Null Hypothesis

In statistics, a hypothesis that proposes no significant difference or effect; the hypothesis that a researcher tries to disprove.

Alpha Level

The threshold of significance in hypothesis testing, representing the probability of making a Type I error.

Confidence Interval

A range of values, derived from sample statistics, used to estimate the true parameter of a population with a specified level of confidence.

Null Hypothesis

A statement in statistical hypothesis testing that proposes no significant difference or effect, assumed true until evidence suggests otherwise.