If the Desired Reserve Ratio Is Ten Percent, Currency in Circulation

question 152

Multiple Choice

If the desired reserve ratio is ten percent, currency in circulation is $400 billion, chequable deposits are $800 billion, and excess reserves total $0.8 billion, then the currency ratio is ________.

• A) .25
• B) .50
• C) .40
• D) .05

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Definitions:

Same Industry

Refers to companies and businesses that operate within the same sector or category, offering similar products or services.

Peculiar Conditions

Unique or unusual circumstances that can affect an outcome or situation in specific cases.

General Economic Conditions

The overall state of the economy, including factors like inflation rates, unemployment levels, and GDP growth.

Price-Earnings Ratio

A financial metric comparing the present price of a corporation's stock to its earnings per share to assess whether the stock is under or overvalued.