Suppose All Banks Are Subject to a Uniform Reserve Requirement

question 108

Multiple Choice

Suppose all banks are subject to a uniform reserve requirement of 20 percent and that the Gamblers Last Chance Bank of Las Vegas has zero excess reserves.If a new customer deposits $10,000, the bank can now extend new loans up to a maximum of:

• A)$2,000.
• B)$8,000.
• C)$10,000.
• D)$50,000.
• E)$200,000.

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Definitions:

Serial Entrepreneurs

describes individuals who repeatedly start new businesses and take on the risk of being an entrepreneur, moving from one venture to the next.

Entrepreneurship

The process of establishing a company or companies, bearing financial uncertainties with the aspiration for gains.

Entrepreneurship

The process of designing, launching, and running a new business, often characterized by innovation, risk-taking, and the pursuit of profit.

Strategic Thinking

The process of analyzing critical factors and variables that will influence the long-term success of one's decisions or actions.