Exhibit 17-1 ​

question 136

Multiple Choice

Exhibit 17-1
​
A bank's assets consist of $500,000 in total reserves, $1,600,000 in loans, and a building worth $1,200,000. Its liabilities and capital consist of $2,000,000 in demand deposits and $1,300,000 in capital.
-Refer to Exhibit 17-1. If the required reserve ratio is 25 percent, what is the level of the bank's excess reserves? How much money could the excess reserves be used to create in the banking system as a result?

• A)​zero; zero
• B)​$500,000; $500,000
• C)​$500,000; $2,000,000
• D)​$250,000; $1,000,000

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Definitions:

Synaptic Pruning

The process by which extra neurons and synaptic connections are eliminated in order to increase the efficiency of neuronal transmissions in the brain.

Growth Stunting

A condition characterized by inadequate growth in children, typically due to chronic malnutrition or repeated infections.

Marasmus

A severe form of malnutrition caused by a significant deficiency in calories and protein, leading to substantial weight loss and muscle wasting.

Kwashiorkor

A form of severe malnutrition caused by inadequate protein intake, characterized by swelling, hair discoloration, and liver damage.