In the Nineteenth Century, When There Were Often Bank Runs

question 116

Multiple Choice

In the nineteenth century, when there were often bank runs caused by crop failures, banks would make relatively fewer loans and hold relatively more excess reserves. By itself, which action should the banks have taken?

• A) They should have increased both the money multiplier and the money supply.
• B) They should have decreased the money multiplier and increased the money supply.
• C) They should have increased the money multiplier and decreased the money supply.
• D) They should have decreased both the money multiplier and the money supply.

Determine the effects of errors in inventory recording on financial statements.

Apply various inventory costing methods (FIFO, LIFO, Specific Identification, Weighted Average) in different scenarios.

Calculate and interpret days' sales in inventory.

Understand the impact of inventory valuation methods on gross profit and cost of goods sold.

---

Definitions:

Diminishing Marginal Returns

The principle that as the quantity of an input increases, the additional output generated from that input eventually decreases.

Custom Picture Frames

Bespoke framing solutions designed to fit specific dimensions and aesthetic preferences of photographs, artworks, or documents.

Diminishing Returns

The principle stating that as more of a variable input is added to a fixed input, the additional output produced from each new unit of input eventually decreases.

Rocking Chairs

A type of furniture designed with curved bands attached to the bottom, allowing it to rock back and forth.