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:

Endowment

The total resources, including wealth, talent, or abilities, that individuals or institutions possess, which can influence their capacity to make economic decisions.

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Financial support paid by one ex-spouse to another after divorce, as ordered by a court.

Budget Line

A graphical representation that shows all possible combinations of two goods that a consumer can afford with their income level.

Net Seller

An entity or individual who sells more of a commodity, security, or other assets than they buy.