Use the Following to Answer Questions

question 208

Multiple Choice

Use the following to answer questions:
Scenario: First National Bank
First National Bank has $80 million in checkable deposits, $15 million in deposits with the Federal Reserve, $5 million cash in the bank vault, and $5 million in government bonds.
-(Scenario: First National Bank) Look at the scenario First National Bank. Given the bank's minimum reserve ratio, how much can the bank issue in loans?

• A)$76 million
• B)$8 million
• C)$6 million
• D)$4 million

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Definitions:

Market Size

The total potential sales volume or number of consumers available to a product or service within a given market.

Tax on Sellers

A financial charge imposed on sellers of goods or services, which can affect the supply and pricing of those goods or services.

Tax on Buyers

A levy imposed on consumers by the government, which typically raises the purchase price of goods and services, affecting demand.

Shortage

A situation in which the demand for a product or service exceeds the supply available at a specific price.