Suppose That a Bank with No Excess Reserves Receives a Deposit

question 63

Multiple Choice

Suppose that a bank with no excess reserves receives a deposit into a checking account of $10,000 in currency. If the required reserve ratio is 0.20, what is the maximum amount that the bank can lend out?

• A)$2000
• B)$8000
• C)$10,000
• D)$50,000

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Definitions:

Aggression

Behavior characterized by physical or verbal attack intended to harm a person or object.

Schools

Educational institutions where students receive instruction and learning experiences in various academic subjects from teachers and educators.

Downward Social Comparisons

Comparing oneself with others who are worse off in order to feel better about one's own situation.

Upward Social Comparisons

Comparing oneself with others who are perceived to be superior in some way, which can affect one's self-esteem and motivations.