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Test your understanding with targeted questions related to the topic.
Question 1
Easy
What is the reserve requirement?
π‘ Hint: Think about how banks manage deposits and withdrawals.
Question 2
Easy
What happens to the excess reserves in a bank?
π‘ Hint: Consider the bank's role in the economy.
Practice 4 more questions and get performance evaluation
Engage in quick quizzes to reinforce what you've learned and check your comprehension.
Question 1
What percentage must banks keep as reserves?
π‘ Hint: Think about the flexibility of different banking systems.
Question 2
True or False: A bank can lend out all of its deposits without retaining any reserves.
π‘ Hint: Reflect on the regulating rules governing banks.
Solve 1 more question and get performance evaluation
Push your limits with challenges.
Question 1
Suppose a bank has a reserve requirement of 20%. A customer deposits $1,000. How much can the bank lend out, and what will happen to the money after lending?
π‘ Hint: Calculate the reserve first and consider the cycle of spending.
Question 2
Discuss the potential long-term effects on the economy if all banks lowered their reserve requirement to 5%.
π‘ Hint: Consider both positive (growth) and negative (inflation risk) outcomes.
Challenge and get performance evaluation