The Quantity of Reserves Demanded Rises When the ________

question 109

Multiple Choice

The quantity of reserves demanded rises when the ________.

• A) bank rate rises
• B) bank rate falls
• C) overnight funds rate rises
• D) overnight rate falls

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Definitions:

Variable Costs

Costs that change in proportion to the level of activity or volume of output produced.

Fixed Costs

Overheads that are unaffected by the quantity of output or sales, for example, tenancy costs, wages for staff, and indemnity expenses.

Contribution Format

A type of income statement presentation that separates fixed and variable costs, allowing for an easier assessment of how changes in volume affect profitability.

Contribution Format

A way of presenting income statements where variable costs are deducted from sales to find the contribution margin, then fixed costs are deducted to find net operating income.