If a Bank's Desired Reserve-Deposit Ratio Is 33% and It

question 8

Multiple Choice

If a bank's desired reserve-deposit ratio is 33% and it has deposit liabilities of $100 million and reserves of $50 million,it

• A) has too few reserves and will reduce its lending.
• B) has excess reserves and will increase its lending.
• C) has the correct amount of reserves and outstanding loans.
• D) should increase the amount of its reserves.
• E) should decrease the amount of its reserves.

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Definitions:

Unilateral Agreement

A unilateral agreement is a contract in which only one party makes a promise or undertakes a performance obligation, while the other party is not legally bound to reciprocate.

Bilateral Agreement

A legally binding contract between two parties or countries involving mutual commitments or trade-offs.

Express Agreement

A contract where the terms and conditions are stated clearly and explicitly, often in written form.

Handwritten Notes

Personal or professional notes written by hand as opposed to being typed or digitally recorded, often used for reminders, memoranda, or informal documentation.