If a Bank Had a Desired Reserve Ratio of 10

question 20

Multiple Choice

If a bank had a desired reserve ratio of 10 percent and excess reserves of $2000,what is the largest loan it could extend?

• A)$200
• B)$1800
• C)$2 000
• D)$20 000

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Definitions:

Professional Bureaucracy

An organizational structure characterized by highly specialized jobs and a strong reliance on trained professionals to make decisions.

Machine Bureaucracy

An organizational structure characterized by a high degree of formalization and centralized decision-making.

Adhocracy

An organizational structure that is flexible and adaptable, characterized by a lack of formal hierarchy and the ability to quickly respond to changes.

Professional Bureaucracy

An organizational structure that relies on trained professionals to make key decisions rather than on a centralized authority.