When We Say That the Canadian Banking System Is Fractional

question 184

Multiple Choice

When we say that the Canadian banking system is fractional reserve system, it means:

• A)chartered banks loan out only a small fraction of their deposits.
• B)chartered banks have to keep a large percentage of their deposit to meet everyday cash withdrawals.
• C)chartered banks loan out the entire deposits and do not have to meet their everyday cash withdrawal.
• D)chartered banks loan out most of their deposits, keeping only a small percentage of their deposits to meet everyday cash withdrawals.

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Definitions:

Fixed Asset Turnover Ratio

A financial indicator that measures a company's ability to generate net sales from fixed-asset investments, specifically property, plant, and equipment.

Financial Statements

Official documentation detailing the financial transactions and status of an entity, such as a company or individual, usually comprising a balance sheet, income statement, and statement of cash flows.

Common Shares

A type of equity ownership in a corporation, where holders have voting rights and potential dividends, but come after preferred shareholders in bankruptcy or liquidation.

FIFO

First-In, First-Out, an accounting method for valuing the cost of goods sold that assumes the first items placed in inventory are sold first.