The Required Reserve Ratio Is 10 Percent and Charlie Deposits

question 167

Multiple Choice

The required reserve ratio is 10 percent and Charlie deposits $3,000 in her checking account.The bank must

• A)increase reserves by $3,000.
• B)increase reserves by $300.
• C)decrease reserves by $3,000.
• D)decrease reserves by $300.
• E)not change its reserves until Charlie decides to withdraw her funds.

---

Definitions:

Operating Revenues

The income earned from a company's primary business activities, excluding one-time or unusual expenses or incomes.

Variable Operating Costs

Expenses that vary in direct proportion to the level of production or sales volume.