Suppose That Initially a Bank Has Excess Reserves of $800

question 93

Multiple Choice

Suppose that initially a bank has excess reserves of $800 and the reserve ratio is 30%. Then Andy deposits $1,000 of cash in his checking account and the bank lends $600 to Molly. That bank can lend an additional:

• A) $100.
• B) $800.
• C) $900.
• D) $300.

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Definitions:

United

Refers to entities or individuals joined together towards a common goal or forming a single entity.

Medieval Weapon

Weapons used during the Middle Ages in Europe, including swords, bows, spears, and various types of siege engines.

Gunpowder

Gunpowder is a chemical explosive made from sulfur, charcoal, and potassium nitrate, playing a crucial role in the development of firearms and artillery in warfare.

Crossbow

A medieval weapon consisting of a bow mounted on a stock that shoots projectiles, known as bolts or quarrels, which was used for hunting and warfare.