Suppose a Bank Has $100,000 in Deposits and a Minimum

question 48

Multiple Choice

Suppose a bank has $100,000 in deposits and a minimum reserve requirement of 7 percent.Then required reserves are:

• A) $100,000
• B) $93,000
• C) $70,000
• D) $7,000

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Definitions:

Common Stock

Common Stock represents ownership shares in a corporation, giving holders voting rights and a share in the company's profits through dividends.

Revenues

The total income generated from normal business operations and other activities, such as the sale of goods or services.

Credit

An accounting entry that either increases a liability or equity account, or decreases an asset or expense account. It is also used in banking to denote a positive balance.

Debits

Financial entries that represent an increase in assets or expenses or a decrease in liabilities, equity, or income on a company's balance sheet or income statement.