-The Above Table Gives the Initial Balance Sheet for Mega

question 510

Multiple Choice

-The above table gives the initial balance sheet for Mega Bank. Mega Bank's desired reserves equal its required reserves. Based on the initial balance sheet, what is the required reserve ratio for Mega Bank?

• A) 3 percent
• B) 10 percent
• C) 30 percent
• D) 1.4 percent

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Definitions:

Perfectly Competitive

An economic model where numerous buyers and sellers exist, there's unrestricted entry and exit, and the product offered is uniform.

Market Price

The present cost at which a product or service is available for purchase or sale in the marketplace.

Profit

The financial gain obtained when the amount earned from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Industry Supply

The total output of goods or services that firms in a specific industry are willing and able to sell at various prices, over a certain period.