In the Simple Deposit Expansion Model,a Decline in Checkable Deposits

question 84

Multiple Choice

In the simple deposit expansion model,a decline in checkable deposits of $500 when the required reserve ratio is equal to 10 percent implies that the Fed

• A)sold $500 in government bonds.
• B)sold $50 in government bonds.
• C)purchased $50 in government bonds.
• D)purchased $500 in government bonds.

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Definitions:

Step-down Method

A cost allocation method that sequentially assigns service department costs to other departments, including other service departments, based on specified criteria.

Machine Hours

A measure of production time, representing the total hours that machinery is operated in the manufacturing of a product.

Number Of Employees

The overall number of people working for a firm, encompassing both those in full-time and part-time positions.

Step-down Method

A cost allocation method used in accounting to distribute overhead costs to various departments or products.