The Following Is a Consolidated Balance Sheet for the Chartered

question 46

Multiple Choice

The following is a consolidated balance sheet for the chartered banking system.All figures are in billions.Assume that the desired reserve ratio is 20 percent. Refer to the above information.If there is a deposit of $10 billion of new currency into chequing accounts in the banking system, excess reserves will increase by:

• A)$1 billion.
• B)$2 billion.
• C)$8 billion.
• D)$10 billion.

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Definitions:

Cost Structure

The composition of fixed and variable costs that a company incurs during the production of goods or services, affecting profitability.

CVP Chart

A graphical representation used in Cost-Volume-Profit analysis to show the relationship between costs, volume of sales, and profit.

Major Components

Principal parts or elements that form the larger system or structure.

Break-even Point

The point at which total costs and total revenue are equal, resulting in no gain or loss for the business.