Consider the Following T-Account for a Bank If the Required Reserve Ratio Is 20 Percent and the }

question 112

True/False

Consider the following T-account for a bank:
$\begin{array}{|ll|ll|}\hline\text { Assets } && \text { Liabilities } \\\hline \text { Reserves } & \$ 1,000 & \text { Deposits } & \$ 5,000 \\\hline \text { Loans } & \$ 4,000 & &\\\hline\end{array}$ If the required reserve ratio is 20 percent and the bank is holding no excess reserves,the bank at this point can make no more loans.

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Definitions:

Percent

A method of representing a number as a part of 100.

Straight Commission

A compensation method where an employee or salesperson is paid solely based on the amount of sales generated.

Annual Quota

An annual quota is a fixed limit on the quantity of something that can be produced, imported, or acquired within a single year.

Gross Earnings

The total amount of money an individual earns before any deductions or taxes are applied.