Suppose That a Bank Has $100 Million in Checkable Deposits

question 163

Multiple Choice

Suppose that a bank has $100 million in checkable deposits and the required reserve ratio is 0.1.If the bank has $5 million in excess reserves,then its actual reserves must be

• A)$0
• B)$5 million
• C)$10 million
• D)$15 million
• E)$20 million

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Definitions:

Population Parameter

A numerical characteristic or feature of an entire population, such as its mean or standard deviation.

Sampling Distributions

The distribution likelihood of a statistical value gathered from multiple samples from a given population.

Consistent Estimator

An attribute of an estimator indicating that as the sample size increases, the estimates it produces converge in probability to the parameter being estimated.

Sample Mean

The mean value derived from a dataset sample, utilized to predict the overall population's average.