The Amount of Required Reserves a Bank Holds Depends on the

question 129

Multiple Choice

The amount of required reserves a bank holds depends on the

• A) required reserve ratio.
• B) demand-deposit ratio.
• C) excess-reserve ratio.
• D) currency ratio.

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Definitions:

Contribution Margin

The difference between sales revenue and variable costs of production, used to cover fixed costs and generate profit.

Controllable Fixed Costs

Fixed costs that management has the ability to influence or change in the short term, such as advertising expenses.

Controllable Margin

The portion of profit or contribution margin that a manager has direct control over, before fixed costs and overhead are deducted.

Responsibility Report

A management tool that collects and reports planned and actual financial information by responsibility centers.