If a Bank Has $1 Million in Demand Deposits, $350,000

question 69

Multiple Choice

If a bank has $1 million in demand deposits, $350,000 in reserves, and faces a 30 percent reserve requirement, the amount of money that a bank could initially create by loaning out their excess reserves is:

• A)​$50,000.
• B)​$300,000.
• C)​$350,000.
• D)​$700,000.

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Definitions:

Formalization

The process of establishing official procedures, rules, and documentation within an organization.

Work Processes

The established methods and procedures used to effectively complete tasks and achieve organizational goals.

Functional Structure

An organizational design that groups employees by their similar specialties, roles, or tasks.

Dysfunctional Conflict

A type of conflict that hinders organizational performance, disrupts operations, and negatively impacts the workplace environment.