A Bank Has a 10 Percent Reserve Requirement, $4,000 in Deposits

question 49

Multiple Choice

A bank has a 10 percent reserve requirement, $4,000 in deposits, and has loaned out all it can given the reserve requirement.

• A)It has $40 in reserves and $3,960 in loans.
• B)It has $400 in reserves and $3,600 in loans.
• C)It has $444 in reserves and $3,556 in loans.
• D)None of the above is correct.

---

Definitions:

Pets

Domesticated animals kept for companionship or pleasure rather than for work or food.

General Adaptation Syndrome

A theory proposed by Hans Selye delineating a three-stage process (alarm, resistance, exhaustion) that describes the physiological changes the body goes through when under stress.

Alarm Reaction

The initial phase in the body's response to stress, characterized by the activation of the sympathetic nervous system and the release of stress hormones.

Exhaustion

A condition of intense mental or physical tiredness, typically caused by excessive stress or overexertion.