What Are a Bank's Target Reserves Equal To

question 17

Multiple Choice

What are a bank's target reserves equal to?

• A)Its demand deposits divided by the target reserve ratio.
• B)The amount of outstanding loans multiplied by the target reserve ratio.
• C)Its demand deposits multiplied by the target reserve ratio.
• D)The amount of its demand deposits.
• E)The sum of its demand deposits and notice deposits.

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Definitions:

Opposite

Across from.

Hypotenuse

The longest side of a right-angled triangle, opposite the right angle, and determined by the square root of the sum of the squares of the other two sides.

Vectors

Quantities that have both magnitude and direction, represented by arrows in physics and mathematics.

Magnitude

Refers to the size or extent of something, often used in the context of numbers, earthquakes, and vectors to denote their strength or value.