If a Bank That Desires to Hold No Excess Reserves

question 65

Multiple Choice

If a bank that desires to hold no excess reserves and has just enough reserves to meet the required reserve ratio of 15 percent receives a deposit of $600,it has a

• A)$600 increase in excess reserves and no increase in required reserves.
• B)$600 increase in required reserves and no increase in excess reserves.
• C)$510 increase in excess reserves and a $90 increase in required reserves.
• D)$90 increase in excess reserves and a $510 increase in required reserves.

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Definitions:

Larynx

The hollow muscular organ forming an air passage to the lungs and holding the vocal cords; also known as the voice box.

Pharynx

The muscular tube in humans and other vertebrates connecting the mouth and nasal cavities to the esophagus and larynx; plays a key role in swallowing and breathing.

Vocal Cords

Bands of muscle tissue located in the larynx that vibrate to produce sound when air is expelled from the lungs, enabling speech and singing.

Epithelium

A membranous tissue covering internal organs and other internal surfaces of the body, involved in protection, secretion, and absorption.