Suppose That a Bank Has $6,000 in Checkable Deposits and the Required

question 51

Multiple Choice

Suppose that a bank has $6,000 in checkable deposits and the required reserve ratio is 0.2.If the bank wishes to hold no excess reserves,its actual reserves will be

• A)$4,000
• B)$1,200
• C)$3,000
• D)less than $1,000
• E)$4,800

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Definitions:

Exchange Rates

The value of one currency for the purpose of conversion to another.

British Pounds

The official currency of the United Kingdom, known as GBP (Great Britain Pound).

Flexible Exchange Rates

A system where the value of a currency is allowed to fluctuate according to the foreign exchange market without direct interference by the country's government.

Exporting

The act of selling goods or services produced in one country to another country.