Suppose That a Bank Has $100 Million in Checkable Deposits

question 134

Multiple Choice

Suppose that a bank has $100 million in checkable deposits and the required reserve ratio is 0.1.If the bank has $5 million in excess reserves,then it would be able to lend out

• A)$0
• B)$5 million
• C)$10 million
• D)$15 million
• E)$20 million

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Definitions:

Cognitive

Pertaining to the processes of thought, perception, memory, and information processing in the human brain.

Social Processes

The patterns of interaction and social behavior that occur among individuals and groups within a society, shaping the social structure and culture.

Prison Inmates

Individuals who have been convicted of a crime and are currently serving their sentences in a prison facility.

Manufacturing Companies

Businesses involved in the production of goods from raw materials through processes that involve a combination of human labor, machinery, and chemical processing.