If a Bank Has a Required Reserve Ratio of 30%,excess

question 93

Multiple Choice

If a bank has a required reserve ratio of 30%,excess reserves of $45,000,000,and deposits of $100,000,000,how much can the bank lend out?

• A) $13,500,000
• B) $30,000,000
• C) $43,500,000
• D) $45,000,000
• E) $145,000,000

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Definitions:

LIFO

Stands for Last In, First Out, an inventory valuation method which assumes that the last items placed in inventory are sold first.

Financial Statement

Documented records that outline the financial activities and condition of a business, individual, or other entity.

LIFO Reserve

The difference between the cost of inventory calculated under the LIFO method and its cost calculated under the FIFO method.

FIFO Firms

Companies that apply the First-In, First-Out method in their inventory management, recognizing the oldest inventory items as the first sold.