Suppose University Bank Has Zero Excess Reserves

question 90

Multiple Choice

Suppose University Bank has zero excess reserves.If the required reserve ratio decreases,the

• A)Bank's assets will increase.
• B)Bank will not have enough required reserves.
• C)Bank will be able to make more loans.
• D)Money multiplier will decrease.

---

Definitions:

Direct Labor

Workers who are directly involved in the manufacturing of goods or provision of services, whose labor costs are directly attributed to the product or service.

Raw Materials

Fundamental substances utilized as the starting point in the manufacturing process to create products.

Predetermined Overhead

An estimated amount of overhead cost assigned to each unit of production in advance of the actual production.

Actual Manufacturing

The real and factual process of producing goods, as opposed to planned or estimated production.