A Lower Reserve Requirement

question 146

Multiple Choice

A lower reserve requirement

• A) increases the ability of banks to make loans.
• B) further limits deposit creation.
• C) lowers the money multiplier.
• D) restricts the borrowing capability of borrowers.

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Definitions:

Common Shares

Common Shares are units of ownership in a company that entitle the shareholders to vote at shareholders' meetings and receive dividends.

EBITDA

Earnings before interest, taxes, depreciation, and amortization.

Financial Strength

A measure of a company’s ability to meet its financial commitments, indicating its overall financial stability.

International Financial Reporting Standard

A set of accounting standards developed by the International Accounting Standards Board (IASB) that is used globally to prepare public company financial statements.