A Bank Has $8,000 in Checkable Deposits

question 84

Multiple Choice

A bank has $8,000 in checkable deposits. If the reserve requirement is 0.2, _____.

• A)the bank can lend $8,000
• B)the bank cannot lend more than $6,400
• C)the bank cannot lend more than $5,400​
• D)the bank can lend $1,600
• E)the bank can lend $7,000

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Definitions:

Elasticity Coefficient

A measure used to show the responsiveness of the quantity demanded or supplied to a change in one of its determinants, like price or income.

Supply

A schedule or curve that shows the various amounts of a product that producers are willing and able to make available for sale at each of a series of possible prices during a specified period of time.

Elastic

A characteristic of a good or service indicating that its quantity demanded or supplied changes significantly when there is a change in price.

Elasticity Of Supply

A measure of how much the quantity supplied of a good changes in response to a change in price.