If the Actual Reserve-Deposit Ratio Equals 8% for a Bank,but

question 113

Multiple Choice

If the actual reserve-deposit ratio equals 8% for a bank,but the desired reserve-deposit ratio for this bank is 10%,the bank should

• A) do nothing because this is a profitable situation.
• B) stop making loans.
• C) send the extra reserves to the central bank.
• D) request that customers withdraw deposits from the bank.
• E) make more loans in order to earn interest.

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Definitions:

Worthless

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Lacking in motivation, interest, or enthusiasm toward engaging in any activity or goal.

Prescription

An authorized instruction from a medical practitioner that allows a patient to be provided medicine or treatment.

MAO Inhibitor

A type of antidepressant drug that works by inhibiting the action of the enzyme monoamine oxidase in the brain, affecting mood and emotional responses.