Bank a Holds $1 Million in Required Reserves and the Required

question 113

Multiple Choice

Bank A holds $1 million in required reserves and the required reserve ratio is 9 percent.It follows that Bank A holds checkable deposit liabilities that total approximately

• A) $111 million.
• B) $11.11 million.
• C) $90 million.
• D) $900 million.

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Definitions:

Great Lakes

A group of five large, interconnected freshwater lakes on the border between the United States and Canada, comprising Lakes Superior, Michigan, Huron, Erie, and Ontario.

McCulloch V. Maryland

A landmark Supreme Court case in 1819 that established the principle of national supremacy and the constitutionality of a federal bank.

Necessary And Proper Clause

A provision in the U.S. Constitution granting Congress the power to pass all laws necessary and proper for carrying out its enumerated powers.

Constitution

The fundamental law or set of principles by which a state or organization is governed, outlining the structure of government and the rights of the citizens.