Exhibit 25-2 a Bank's Assets Consist of $1,000,000 in Total

question 79

Multiple Choice

Exhibit 25-2 A bank's assets consist of $1,000,000 in total reserves,$2,100,000 in loans,and a building worth $1,200,000.Its liabilities and capital consist of $3,000,000 in demand deposits and $1,300,000 in capital.
Refer to Exhibit 25-2.If the bank is required to keep reserves equal to one-third of deposits,what is the level of the bank's excess reserves? How much money could the excess reserves be used to create in the banking system as a result?

• A) zero; zero
• B) $300,000; $300,000
• C) $300,000; $900,000
• D) $700,000; $2,100,000

---

Definitions:

Output Standards

Measure performance results in terms of quantity, quality, cost or time.

Performance Results

The outcomes or outputs stemming from the activities or tasks performed by an individual or organization, often measured against set goals or standards.

Accomplished Work

The completed tasks or projects that have been successfully carried out.

Controlling Function

One of the core functions of management, involving monitoring performance and implementing necessary actions to achieve organizational goals.