Which of the Following Statements BEST Describes Why a Decrease

question 41

Multiple Choice

Which of the following statements BEST describes why a decrease in reserve requirements often results in an increase in the money supply?

• A) A decrease in reserve requirements gives banks more money to better determine their interest rates.
• B) A decrease in reserve requirements gives banks more money to pay off their debts.
• C) A decrease in reserve requirements gives banks more money to lend out.
• D) A decrease in reserve requirements gives banks more money to offer in dividend payments to their clients.
• E) A decrease in reserve requirements gives banks more money to reward their employees for meritorious financial ventures.

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Definitions:

Overhead Applied

A costing method that assigns an estimated amount of factory overhead costs to individual units of production based on a predetermined rate.

Job P513

A specific project, order, or batch identified by the code P513 within a job costing system.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead to individual jobs or products.

Direct Labor-Hour

An indicator of the cumulative hours employees dedicated to the manufacturing process have worked.