Answer the Question on the Basis of the Following Table

question 83

Multiple Choice

Answer the question on the basis of the following table for a commercial bank or thrift: $\begin{array}{c}\begin{array}{c}(1) \\\text {Legal Reserve}\\\underline{\text {Ratio (\%) }}\\10 \\20 \\25 \\30\end{array}\begin{array}{c}(2) \\\text {Checkable}\\\underline{\text {Deposits}}\\ \$ 40,000 \\40,000\\40,000\\40,000\end{array}\begin{array}{c}(3) \\\text {Actual}\\\underline{\text {Reserves}}\\\$ 10,000 \\10,000\\10,000\\10,000\end{array}\end{array}$

Refer to the table.When the legal reserve ratio is 10 percent,the money-creating potential of this single bank is:

• A) $0.
• B) $6,000.
• C) $30,000.
• D) $60,000.

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Definitions:

Chronic Depressive Disorder

A persistent form of depression characterized by a depressed mood more days than not, for at least two years.

Delusions

Fixed false beliefs that are resistant to reason or confrontation with actual fact, commonly observed in psychiatric conditions.

Hallucinations

Perceptions that occur without an external stimulus, but which have the compelling sense of reality of true perceptions.

Agoraphobia

Anxiety disorder characterized by fear of places and situations in which it would be difficult to escape, such as enclosed places, open spaces, and crowds.