Table 29-5. -Refer to Table 29-5. If the Bank Faces a Reserve

question 381

Multiple Choice

Table 29-5.
-Refer to Table 29-5. If the bank faces a reserve requirement of 6 percent, then the bank

• A)is in a position to make a new loan of $12,000.
• B)is in a position to make a new loan of $18,000.
• C)has excess reserves of $12,000.
• D)None of the above is correct.

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Definitions:

Depreciation

The method by which a business deducts the cost of tangible assets over time, recognizing the decrease in value of assets.

Taxed

Refers to income, property, or purchases on which tax is imposed by governmental authorities.

Depreciation

The reduction in the value of an asset over time, particularly for tax purposes.

Equipment

Tangible property used in operations, such as machinery or computer hardware, which can often be depreciated for tax purposes.