The Figures in the Table Below Are for a Single

question 46

Multiple Choice

The figures in the table below are for a single commercial bank. All figures are in thousands of dollars. Refer to the data given above. If the reserve ratio is 10 percent and a check for $10,000 is drawn and cleared in favor of another bank, then the actual reserves of the bank above will:

• A) Still be $40,000
• B) Decrease $10,000
• C) Decrease $11,000
• D) Decrease $9,000

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Definitions:

Demand and Supply

Fundamental economic concepts representing the quantity of a good or service consumers are willing and able to purchase and the quantity offered by sellers.

Inferior Good

An inferior good is a type of good whose demand decreases when consumer income rises, unlike normal goods, for which the opposite is observed.

Income

Earnings received by an individual or entity in exchange for labor or investment, typically expressed in monetary terms.

Demand Curve

A pictorial representation that maps out the correlation between a good's price and its demand over an allotted time.