A Bankʹs Required Reserves Are Calculated by Multiplying

question 416

Multiple Choice

A bankʹs required reserves are calculated by multiplying .

• A) its deposits by the required reserve ratio
• B) cash in its vault by the required reserve ratio
• C) the sum of its deposits and cash in its vault by the reserve ratio
• D) the gold in its vault by the reserve ratio

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Definitions:

Dividends

Payments made by a corporation to its shareholder members, typically from profits earned.

Exchange Rates

The rate at which one currency is exchanged for another, affecting international trade and investments by determining how much one currency is worth in terms of another.

Foreign Subsidiary

A company that is based in a different country from the parent company but is owned or controlled by the parent company.

Functional Currency

The main form of money used in the leading economic setting where a business functions.