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.

---

Definitions:

Signal Detection Research

A field of study that explores how decisions are made under conditions of uncertainty and the processes through which signals are distinguished from noise.

Sensation

The process by which sensory receptors and the nervous system receive and represent stimulus energies from the environment.

Light Bulb

A device that produces light from electricity, consisting of a filament housed in a glass vacuum or filled with inert gas, illuminating when electric current passes through.

False Alarm

A situation where a warning or alert is given, but no actual threat or danger exists.