Table 16-3 -Refer to Table 16-3

question 34

Multiple Choice

Table 16-3
$\begin{array}{|c|c|}\hline \text { Assets } & \text { Liabilities } \\\hline \text { Reserves }+\$ 7,000 & \text { Deposits }+\$ 50,000 \\\hline \text { Loans }+\$ 46,000 & \text { Net Worth }+\$ 3,000 \\\hline\end{array}$
-Refer to Table 16-3.Consider the above simplified balance sheet for a bank.If the required reserve ratio is 10 percent,the bank can make a maximum loan of

• A) $2,000.
• B) $5,000.
• C) $6,300.
• D) $45,000.

---

Definitions:

Credit Cards

Financial tools issued by banks that allow users to borrow money up to a certain limit to purchase items or withdraw cash.

Collateral

An asset pledged as security for repayment of a loan, to be forfeited in the event of a default.

Liens

Legal claims or holds on property as security for the payment of a debt or performance of some obligation.

Priority

The status of being more important or urgent than something else, often determining the order in which tasks or responsibilities are addressed.