If a Bank Has Deposits of $10,000 and Reserves of $5,000

question 433

True/False

If a bank has deposits of $10,000 and reserves of $5,000 and if the reserve requirement is 20%, it can make loans of $5,000.

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Definitions:

Introspection

The examination of one's own conscious thoughts and feelings, used in psychology to explore the inner processes of the mind.

Mental Processes

Internal, covert activities of the mind, such as thinking, reasoning, imagining, and remembering.

Behaviorist

A psychologist who studies and practices behaviorism, focusing on observable and measurable aspects of human and animal behaviors rather than internal processes like thinking or emotion.

Functionalism

A theory in psychology that emphasizes the purpose of consciousness and behavior, explaining psychological processes in terms of their role or function in helping individuals adapt to their environment.