Learning Path
Question & Answer
Choose the Best Answer
$100,000
$200,000
$300,000
$400,000
Understanding the Answer
Let's break down why this is correct
The reserve requirement says the bank must hold a portion of deposits safely. Other options are incorrect because A 200,000 reserve would mean the bank keeps 20% of deposits, not 10%; A 300,000 reserve would imply a 30% reserve rate, which is higher than the stated 10%.
Key Concepts
Commercial Bank Reserves
easy level question
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Deep Dive: Commercial Bank Reserves
Master the fundamentals
Definition
Commercial Bank Reserves involves understanding how banks manage their reserves, including required reserves and excess reserves. This topic is crucial in determining a bank's capacity to lend and its adherence to reserve requirements set by regulatory authorities.
Topic Definition
Commercial Bank Reserves involves understanding how banks manage their reserves, including required reserves and excess reserves. This topic is crucial in determining a bank's capacity to lend and its adherence to reserve requirements set by regulatory authorities.
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