A Bank Has $200,000 in Deposits and $190,000 in Loans

question 130

Multiple Choice

A bank has $200,000 in deposits and $190,000 in loans. It has loaned out all it can. It has a reserve ratio of

• A)2.5 percent.
• B)5 percent.
• C)9.5 percent.
• D)10 percent.

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Definitions:

Quantity Demanded

The amount of a good or service consumers are willing and able to buy at a specific price level, ceteris paribus.

Equilibrium Price

The price level where the supply of goods meets the demand for those goods.

Loanable Funds

The total funds available in the financial markets for borrowing, which come from savings and are used for investment.

Borrowed

Refers to funds or resources obtained temporarily from another party, typically with the obligation of returning or repaying the amount with interest.