A Bank's Assets Consist of $1,000,000 in Total Reserves, $2,100,000

question 52

Multiple Choice

A bank's assets consist of $1,000,000 in total reserves, $2,100,000 in loans, and a building worth $1,200,000. Its liabilities and capital consist of $3,000,000 in demand deposits and $1,300,000 in capital. If the required reserve ratio is 10 percent, then the bank's excess reserves is _____ and it can loan out a maximum of _____.

• A)$700,000; $700,000
• B)$70,000; $70,000
• C)$300,000; $30,000
• D)$3,000,000; $3,000,000
• E)$10,000; $1,000

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Definitions:

No Price Discrimination

A pricing strategy where a seller charges the same price to all customers for a product or service, regardless of differences in cost to serve them or their varying valuations.

Low-Value Groups

Groups characterized by minimal economic or social worth within a given context.

High-Value Groups

refers to select groups of individuals or customers considered to have significant worth or potential value to a business, often due to their spending power or influence.

High-End Woks

Premium quality woks that are often superior in material and performance, catering to a niche market.