If a Bank Had $200 Million in Demand Deposits and Desired

question 118

Multiple Choice

If a bank had $200 million in demand deposits and desired a 40 percent reserve ratio,how much would it hold as reserves?

• A)$80 million
• B)$120 million
• C)$200 million
• D)$500 million

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Definitions:

Producer Surplus

The difference between the amount producers are willing to accept for a good or service and the amount they actually receive, showcasing producer gains.

Lawn Maintenance

The ongoing care and upkeep of a grassy area, typically involving mowing, fertilization, weed control, and irrigation.

Service

An intangible economic activity typically performed by one party for the benefit of another, often characterized by expertise, advice, access, or experience.

Producer Surplus

The difference between the amount a producer is willing to accept for a product versus what they actually receive in the market.