Suppose That a Bank Has $100 Million in Checkable Deposits

question 160

Multiple Choice

Suppose that a bank has $100 million in checkable deposits and the required reserve ratio is 0.1.The bank has $5 million in actual reserves,so excess reserves are

• A)$-10 million
• B)$-5 million
• C)0
• D)$5 million
• E)$10 million

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Definitions:

Carbon Dioxide

A colorless, odorless gas (CO2) produced by burning carbon and organic compounds and by respiration, absorbed by plants in photosynthesis.

Hemoglobin

A protein found in red blood cells responsible for transporting oxygen from the lungs to the rest of the body and returning carbon dioxide back to the lungs.

CO

Carbon monoxide, a colorless, odorless gas formed by incomplete combustion of carbon-containing materials, toxic to humans and animals when inhaled.

Carboxyhemoglobin

A complex formed by the binding of carbon monoxide to hemoglobin, which can impede the blood's ability to transport oxygen.