Use the Following Example to Answer the Following Questions

question 64

Multiple Choice

Use the following example to answer the following questions:
Imagine that Stella deposits $25,000 in currency (which she had been storing in her closet) into her checking account at the bank.Assume that this institution has a required reserve ratio of 25 percent.
-As a result of this deposit,by how much will the bank's required reserves increase?

• A) $0
• B) $6,250
• C) $25,000
• D) $31,250
• E) $100,000

---

Definitions:

Discharged From Liability

A condition where an individual or entity is legally released from an obligation or debt.

Paying The Holder

The act of disbursing funds or settling a financial obligation to the lawful possessor of a negotiable instrument.

Indorses

To sign one's name on a document, especially on the back of a check or negotiable instrument, to make it payable to someone other than the stated payee or to accept responsibility.

Discharged From Liability

The release of a debtor from the obligation to repay a debt, usually following a legal process such as bankruptcy proceedings.