A New Deposit to the Banking System Can Result When

question 51

Multiple Choice

A new deposit to the banking system can result when

• A)the Bank of Canada buys a government security from a firm, which keeps the proceeds from the sale in a company vault.
• B)an individual stashes cash in a mattress.
• C)the Bank of Canada buys a government security from a firm, which then deposits the proceeds from the sale in its account at a commercial bank.
• D)a new immigrant to Canada sends cash to his or her home country.
• E)the Bank of Canada sells a government security to a firm which then maintains the asset in a bank.

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Definitions:

Raw Materials Inventory

Raw Materials Inventory accounts for the cost of materials that have been purchased but not yet processed or used in production on the balance sheet.

Accounts Payable

Accounts payable represent a company's obligation to pay off a short-term debt to its creditors or suppliers.

Factory Overhead

Expenses related to operating a factory that cannot directly traced to specific units produced, including utilities, depreciation, and maintenance.

Direct Labor

The labor cost of workers directly involved in the production of goods or the provision of services, considered a variable cost.