If at the End of the Business Day a Bank

question 177

Multiple Choice

If at the end of the business day a bank has $50,000 in excess reserves,and the required reserve ratio is 20 percent,the bank can maximize its profits if it

• A)keeps the excess reserves
• B)loans out $40,000
• C)loans $50,000 to another bank
• D)borrows $50,000 to remove the excess reserves
• E)keeps $10,000 and deposits $40,000 with the Fed

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Definitions:

Altruistic Acts

Behaviors motivated by the desire to benefit others, without expectation of reward.

Emergency Situations

Critical and unexpected circumstances that require immediate action to safeguard health, property, environment, or life.

Repeated Contact

The occurrence of being in the presence of or interacting with someone or something on multiple occasions, which can influence perceptions or relationships.

Broader Public Sphere

The open domain in society where individuals can come together to freely discuss and identify societal problems, and through that discussion influence political action.