If the Chartered Banking System Borrows from the Bank of Canada

question 3

Multiple Choice

If the chartered banking system borrows from the Bank of Canada.

• A)The demand deposits of chartered banks are unchanged, but their reserves increase.
• B)The demand deposits and reserves of chartered banks both decrease.
• C)The demand deposits of chartered banks are unchanged, but their reserves decrease.
• D)The demand deposits and reserves of chartered banks are both unchanged.

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Definitions:

Units

A measure of quantity used to express the amount of a product, service, or resource used or produced in a transaction.

Direct Materials Quantity Variance

The difference between the actual quantity of materials used in production and the standard quantity expected to be used, multiplied by the standard cost per unit of material.

Units

Basic quantities or measures used to express the amount, level, or extent of something.

Fixed Factory Overhead Volume Variance

The difference between the budgeted and actual fixed overhead costs, attributable to variations in the volume of production.