Which of the Following Is an Outcome of an Increase

question 50

Multiple Choice

Which of the following is an outcome of an increase in the reserve requirement ratio?

• A)DIs may hold fewer reserves against their transaction accounts.
• B)DIs are able to lend out a greater percentage of their deposits.
• C)Increased credit availability in the economy.
• D)DIs are only able to lend a smaller percentage of their deposits than before.
• E)A multiplier effect on the supply of DI deposits and thus the money supply.

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Definitions:

Overhead Cost

Indirect costs related to the general operation of the company, such as rent, utilities, and management salaries, not directly tied to production or sales.

Unit

A single, complete, or individual item that can be counted for inventory, production, or sales purposes.

Unit Level Activities

Activities that are performed each time a unit is produced, directly associated with production volume.

Batch Level Activity

Actions or processes that relate to producing a batch of goods or services, often involving costs that change with the number of batches produced rather than individual units.