Suppose That from a New Checkable Deposit,First National Bank Holds

question 162

Multiple Choice

Suppose that from a new checkable deposit,First National Bank holds two million dollars in vault cash,one million dollars in required reserves,and faces a required reserve ratio of ten percent. Given this information,we can say First National Bank has ________ million dollars in excess reserves.

• A)one
• B)two
• C)nine
• D)ten

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Definitions:

Boll Weevil

A beetle that feeds on cotton buds and flowers, historically significant for its devastating impact on the United States cotton industry.

Mid-Nineteenth Century

Refers to the period approximately from 1830 to 1870, a time marked by significant historical events including the American Civil War.

Cotton

A soft, fluffy staple fiber that grows in a boll, or protective case, around the seeds of cotton plants of the genus Gossypium.

Export

The act of sending goods or services from one country to be sold or traded in another.