When $1 Million Is Deposited at a Bank, the Desired

question 106

Multiple Choice

When $1 million is deposited at a bank, the desired reserve ratio is 20 percent, and the bank chooses not to hold any excess reserves but makes loans instead, then, in the bank's final balance sheet, ________.

• A) the assets at the bank increase by $800,000
• B) the liabilities of the bank increase by $1,000,000
• C) the liabilities of the bank increase by $800,000
• D) reserves increase by $160,000

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Definitions:

Research Process

The systematic investigation into and study of materials and sources in order to establish facts and reach new conclusions.

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Done or acting according to a fixed plan or system; methodical.

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A movement and ideology aimed at defining, establishing, and achieving political, economic, personal, and social equality of sexes.

Systematically Manipulate

To control or alter variables in an organized and deliberate manner within an experiment or study.