When $1 Million Is Deposited at a Bank,the Required Reserve

question 107

Multiple Choice

When $1 million is deposited at a bank,the required reserve ratio is 20 percent,and the bank chooses not to hold any excess reserves but makes loans instead,then,in the bank's final balance sheet

• A)the assets at the bank increase by $800,000.
• B)the liabilities of the bank increase by $1,000,000.
• C)the liabilities of the bank increase by $800,000.
• D)reserves increase by $160,000.

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Definitions:

Earthworm

Earthworms are tube-shaped, segmented worms found in soil that play a crucial role in aerating soil and breaking down dead organic matter.

Decomposer

An organism, usually a bacterium or fungus, that breaks down dead cells and materials, recycling nutrients back into the ecosystem.

Producer

Organisms, typically plants, that produce their own food through the process of photosynthesis, serving as a primary source of energy in a food chain.

Nitrogen

A chemical element, denoted by N, which is a vital component of amino acids and nucleic acids.