If the Required Reserve Ratio Is 10 Percent,currency in Circulation

question 220

Multiple Choice

If the required reserve ratio is 10 percent,currency in circulation is $400 billion,checkable deposits are $800 billion,and excess reserves total $0.8 billion,then the money supply is ________ billion.

• A) $8000
• B) $1200
• C) $1200.8
• D) $8400

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Definitions:

Current Ratio

Current Ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year.

Net Income

The total profit of a company after deducting all expenses, taxes, and costs from its total revenue.

Profitability Ratios

Financial metrics that assess a firm's ability to generate profit relative to its revenue, assets, equity, or other financial metrics over a specified period.

Average Common Stockholders' Equity

The average equity stake held by common shareholders within a company, assessed over a specific period.