If Fifth Third Bank Had Actual Reserves of $1 Billion

question 70

Multiple Choice

If Fifth Third Bank had actual reserves of $1 billion and required reserves of $1.1 billion,its excess reserves would be

• A)$1 billion.
• B)$100 million.
• C)0.
• D)-$100 million.
• E)-$1 billion.

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Definitions:

Principal-Agent Problem

A dilemma in economics where one party (the agent) is tasked to make decisions on behalf of another party (the principal), leading to potential conflicts of interest.

Employer-Employee Relationship

The formal association between a company or organization and its workers, governed by an employment contract and labor laws.

Take-Home Pay

The amount of income left after deductions such as taxes and retirement contributions.

Fringe Benefits

Additional compensation provided to employees beyond their normal wages or salaries, such as health insurance, retirement plans, and paid time off.