-In the Balance Sheet Above,the Entries Are in Millions of \text

question 551

Multiple Choice

$\begin{array}{|l|l|}\hline {\text { Assets }} &{\text { Liabilities }} \\\hline \text { Reserves } & \\\$ 400 & \text { Deposits } \\\text { Loans } & \$ 1,200 \\\$ 800 & \\\text { Total } & \text { Total } \\\$ 1,200 & \$ 1,200\\\hline \end{array}$
-In the balance sheet above,the entries are in millions of dollars for the FBN Bank.If the desired reserve ratio equals 10 percent,FBN Bank has excess reserves of

• A) $280 million.
• B) $200 million.
• C) $100 million.
• D) $0.

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Definitions:

Type I Error

The incorrect rejection of a true null hypothesis, often referred to as a "false positive."

Null Hypothesis

A statistical hypothesis that assumes no significant difference or effect exists among the variables being tested.

Test Statistic

A measurement derived from sample observations in a hypothesis test, used to determine if the null hypothesis should be discarded.

Population Mean

The average of all the values in a population, representing the central point around which the data points in the population are distributed.