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:

Berries

Compact, moist fruits typically suitable for eating, featuring a spherical shape, intense coloration, and flavors that span from sweet to acidic.

Nuts

Usually refers to edible seeds enclosed in a hard shell, considered healthy snacks and used as ingredients in various dishes.

Utility Function

A utility function represents the preferences of a consumer over a set of goods or services by assigning values to each possible bundle, reflecting the satisfaction gained.

Berries

Small, juicy fruits with seeds enclosed within the flesh, often consumed raw or used in various culinary dishes.