The Reserve Ratio Is 10% and a Bank Has $600,000

question 325

Multiple Choice

The reserve ratio is 10% and a bank has $600,000 in transaction deposits. The amount of reserves equals

• A)$6,000.
• B)$60,000.
• C)$600,000.
• D)undeterminable without information on cash reserves.

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Definitions:

Preoperational

The second stage in Piaget's theory of cognitive development, during which children start to use language to explore and understand their worlds but do not yet comprehend concrete logic.

Clay

A natural, earthy material consisting of fine-grained minerals, typically used in ceramics and construction, and known for its plasticity when wet.

Piaget's Stages

The four stages of cognitive development proposed by Jean Piaget, through which children progress as they grow: sensorimotor, preoperational, concrete operational, and formal operational.

Cry

The act of shedding tears as an emotional response or due to irritation of the eyes.