Assume That a Single Chartered Bank Has No Excess Reserves

question 87

Multiple Choice

Assume that a single chartered bank has no excess reserves and that the desired reserve ratio is 20 percent.If this bank sells a bond for $1,000 to the Bank of Canada, it can expand its loans by a maximum of:

• A)$1000
• B)$2000
• C)$200
• D)$800

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Definitions:

Skewed Negatively

A description of a distribution of data where the majority of values are concentrated on the right of the mean, leading to a longer tail on the left side.

Distribution

The way in which something is shared out among a group or spread over an area.

Values

Quantitative or qualitative measurements, attributes, or properties of variables or items.

Class Intervals

Ranges of values within which data points are grouped for frequency distribution purposes.