If the Required Reserve Ratio Is 10% but the Money

question 182

Multiple Choice

If the required reserve ratio is 10% but the money multiplier is only 7, then:

• A) the bank is bankrupt.
• B) the banks have zero excess reserves.
• C) the banks held reserves less than the required reserves.
• D) the banks held excess reserves.

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Definitions:

Discretion

The power or right to make decisions based on one's own judgment rather than following a strict set of rules.

Functional Departmentation

The organization of a business into departments based on functions such as marketing, sales, and human resources, to enhance efficiency and specialization.

Organizational Hierarchy

Organizational hierarchy is a system in which roles and responsibilities are ranked in order from highest to lowest, determining the flow of decision-making and authority.

Cross-Functional Problems

Issues that arise from the interaction of different departments or disciplines within an organization, requiring collaborative solutions.