Exhibit 13-2 -Refer to the Table in the Exhibit.Assume a Desired Reserve

question 53

Multiple Choice

Exhibit 13-2

-Refer to the table in the exhibit.Assume a desired reserve ratio of 10 percent.As an individual bank, by how much can CountyBank now increase its lending?  

• A) by $1,000
• B) by $900
• C) by $90
• D) by $0

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Definitions:

Aggregate Income

The total income earned by all individuals and entities in an economy over a specified period.

Income

Money received, especially on a regular basis, for work or through investments.

Net Taxes

The total taxes paid to the government minus any government transfers or subsidies received.

Taxes

Compulsory financial charges imposed by a government on its citizens to fund public expenditures.