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

question 148

Multiple Choice

If the required reserve ratio is 10 percent,currency in circulation is $400 billion,checkable deposits are $1000 billion,and excess reserves total $1 billion,then the currency ratio is

• A) 0.25.
• B) 0.50.
• C) 0.40.
• D) 0.05.

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Definitions:

Simple Rate

The percentage increase or interest rate in a financial calculation, often straightforward or uncomplicated.

Net Present Value

A method used in capital budgeting to analyze the profitability of an investment, calculating the difference between present values of cash inflows and outflows.

Proposed Project

A planned set of interrelated tasks to be executed over a fixed period and within certain cost and other limitations.

Net Present Value

The divergence in current value of cash inflows versus outflows over an established time frame.