Suppose That from a New Checkable Deposit,First National Bank Holds

question 52

Multiple Choice

Suppose that from a new checkable deposit,First National Bank holds two million dollars in vault cash,one million dollars in required reserves,and faces a required reserve ratio of ten percent. Given this information,we can say First National Bank has ________ million dollars on deposit with the Federal Reserve.

• A)one
• B)two
• C)eight
• D)ten

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Definitions:

Ceteris Paribus

In economics, it's a Latin term which stands for "if everything else remains the same," employed to focus on the influence of an individual variable by maintaining all other pertinent factors steady.

Positive Outcomes

Results or consequences of an action that are beneficial or desirable to stakeholders.

Normative

Pertaining to norms or standards, often referring to analyses or statements that express how things should be rather than how they are.

Positive Economic

Refers to economic theories or policies that lead to beneficial outcomes in terms of growth, employment, and living standards.