Suppose the Reserve Requirement Is 10 Percent

question 212

Multiple Choice

Suppose the reserve requirement is 10 percent. If a bank has $5 million of checkable deposits and actual reserves of $500,000, the bank

• A) can safely lend out $500,000.
• B) can safely lend out $5 million.
• C) can safely lend out $50,000.
• D) cannot safely lend out more money.

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Definitions:

Powerful Capitalists

Individuals or entities that hold significant economic power and influence within capitalist societies, often through wealth accumulation and control over production and resources.

Competing Interests

Situations in which different parties or stakeholders have opposing objectives or needs, leading to conflicts or negotiation.

Unobtrusive Control

A subtle form of control that manipulates the behavior of individuals or groups in a manner that is not overtly forceful or direct.

Power Coercively

The ability or act of compelling or controlling actions of others through threats, punishments, or force.