If the Reserve Ratio Is 20 Percent,then $100 of New

question 19

Multiple Choice

If the reserve ratio is 20 percent,then $100 of new reserves can generate

• A)$60 of new money in the economy.
• B)$250 of new money in the economy.
• C)$500 of new money in the economy.
• D)$2,000 of new money in the economy.

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Definitions:

Net Income

Net income refers to the total earnings of a company once all costs, expenses, and taxes are deducted from its total revenue.

Salary Allowances

Specific amounts designated for employees that are over and above their standard salary, often for specific purposes like housing, transportation, or special duties.

Full Time

Employment status characterized by working a minimum number of hours defined by the employer, typically 35-40 hours per week.

Division of Income

The distribution of a company's earnings among various stakeholders, such as dividends for shareholders or reinvestment into the business.