The Desired Reserve Ratio Is 10 Percent

question 232

Multiple Choice

The desired reserve ratio is 10 percent.Joe deposits $1,000 in Bank A.Bank A keeps its minimum desired reserves and lends the excess to Fred.Fred spends his loan at J.C.Penney.J.C.Penney deposits the check it receives from Fred in Bank B.Bank B keeps its minimum desired reserves and lends the excess to Mary.How much can Bank B lend to Mary?

• A)$900
• B)$90
• C)$810
• D)$100
• E)$1,000

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Definitions:

Performance-Oriented

Focused on achieving high levels of performance and often concerned with the outcomes or results of actions rather than the process.

Cohesive

The characteristic of elements of a group sticking together effectively and remaining united in pursuit of common goals.

Group Polarization

The tendency for a group to make decisions that are more extreme than the initial inclination of its members.

Deindividuation

A psychological state where an individual loses self-awareness and a sense of individuality, often leading to uncharacteristic behavior, usually in group contexts.