The Amount of Reserves That a Chartered Bank Wishes to Hold

question 123

Multiple Choice

The amount of reserves that a chartered bank wishes to hold is equal to:

• A)the amount of its demand deposits.
• B)the sum of its demand deposits and time deposits.
• C)its demand deposits multiplied by the desired reserve ratio.
• D)none of the above.

---

Definitions:

Weighing Facts

The process of assessing the importance, relevance, or truth of information or evidence before making a decision or judgment.

Cognitive Dissonance Theory

A theory suggesting that individuals experience discomfort when holding two or more conflicting cognitions, leading them to change their attitudes, beliefs, or actions to reduce the dissonance.

Human Consistency

The tendency of an individual to maintain the same behaviors, attitudes, and beliefs over time.

Natural Disasters

Severe and extreme weather events or geological occurrences that cause significant damage, disruption, or loss of life, such as earthquakes, floods, or hurricanes.