A Bank Cannot Create Money Unless Its ___________

question 403

Multiple Choice

A bank cannot create money unless its ___________.

• A) required reserves are greater than actual reserves
• B) desired reserves are greater than actual reserves
• C) excess reserves are zero
• D) excess reserves equal deposits multiplied by the reserve ratio

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Definitions:

Foreign Subsidiary

A company owned or controlled by another company, the parent company, that is based in a different country than the subsidiary.

Functional Currency

The functional currency is the main currency used by a business or economic entity, reflecting the primary economic environment in which it operates.

Opening Inventory

The value of the goods available for sale at the beginning of an accounting period.

Functional Currency

The currency of the primary economic environment in which an entity operates, usually determined by the currency that mainly influences sales prices for goods and services or the country whose competitive forces and regulations most affect the entity's performance.