Assume the Desired Reserve Ratio Is 10 Percent

question 60

Multiple Choice

Assume the desired reserve ratio is 10 percent.First National Bank has vault cash and deposits with the Bank of Canada of $40 million,loans and securities of $360 million,and demand deposits of $400 million.Which of the following statements about First National is the most accurate?

• A)It is not in a position to extend additional loans.
• B)It could extend a maximum of $10 million of additional loans.
• C)It could extend a maximum of $20 million of additional loans.
• D)It could extend a maximum of $40 million of additional loans.

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Definitions:

Schizophrenia

A chronic brain disorder that affects a person's ability to think clearly, manage emotions, make decisions, and relate to others.

Internal Organs

Organs located inside the body that carry out essential functions, such as the heart, liver, kidneys, and brain.

Positive Symptoms

In psychiatry, symptoms that are added to a person's behavior, such as hallucinations or delusions seen in schizophrenia, unlike negative symptoms that involve a loss of functions.

Schizophrenia

A psychiatric disorder characterized by disturbances in thought, perception, and behavior, including delusions, hallucinations, and disorganized speech.