If a Bank Gets a $100 000 New Deposit,chooses to Lend

question 128

Multiple Choice

If a bank gets a $100 000 new deposit,chooses to lend out $75 000,and increases its excess reserves by $5000 at the same time,what is the desired reserve ratio?

• A)5 percent
• B)20 percent
• C)25 percent
• D)30 percent

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Definitions:

Stereotyping

The act of assigning a set of characteristics to a group of people based on oversimplifications or assumptions, often leading to misrepresentation.

Organizational Settings

refers to the work environment and conditions under which a company or institution operates, including its culture, structure, and processes.

Fundamental Attribution Error

A cognitive bias in which people tend to overemphasize personal characteristics and ignore situational factors when explaining others' behavior.

Lateness

The act of not being on time, which can disrupt schedules, demonstrate a lack of professionalism, and affect productivity and relationships.