If a Bank Has $1 Million of Deposits,a Required Reserve

question 96

Multiple Choice

If a bank has $1 million of deposits,a required reserve ratio of 20 percent,and $300,000 in reserves,it need not rearrange its balance sheet if there is a deposit outflow of

• A) $50,000.
• B) $75,000.
• C) $150,000.
• D) either A or B of the above.

---

Definitions:

Subcutaneous Tissue

The layer of tissue directly under the skin, consisting of fat and connective tissue, which provides insulation and padding to the body.

Hair Follicles

Hair Follicles are the small organ-like structures in the skin from which hair grows, playing a crucial role in hair development and regeneration.

Lymph Channels

Part of the lymphatic system; these channels are responsible for transporting lymph, a fluid containing white blood cells and waste products, back into the bloodstream.

Collagenous Layer

A layer of tissue rich in collagen, which provides strength and flexibility to structures like skin and blood vessels.