If at the End of the Business Day a Bank

question 177

Multiple Choice

If at the end of the business day a bank has $50,000 in excess reserves,and the required reserve ratio is 20 percent,the bank can maximize its profits if it

• A)keeps the excess reserves
• B)loans out $40,000
• C)loans $50,000 to another bank
• D)borrows $50,000 to remove the excess reserves
• E)keeps $10,000 and deposits $40,000 with the Fed

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Definitions:

Explicit

Stated clearly and in detail, leaving no room for confusion or doubt.

Prejudiced

Holding preconceived judgments or opinions about people or groups without sufficient knowledge or experience.

Discrimination

Unjust or prejudicial treatment of different categories of people, especially on the grounds of race, age, or gender.

Traffic Stops

Interactions initiated by law enforcement officers with motorists on public roads, usually due to suspected violations of traffic laws.