If the Reserve Requirement Is 10 Percent, and Banks Keep

question 65

Multiple Choice

If the reserve requirement is 10 percent, and banks keep no excess reserves, an increase in an initial $300 into the banking system will cause an increase in total money of:

• A)0.
• B)00.
• C)$3,000.
• D)$30,000.

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Definitions:

Variable Factory Overhead Controllable Variance

The difference between actual variable overhead incurred and the expected (or budgeted) variable overhead based on standards set by management.

Standard Labor Hours

The estimated amount of time expected to produce a unit of output under normal conditions.

Overhead

Indirect costs related to the day-to-day running of a business, excluding direct costs like labor and materials.

Unfavorable Volume Variance

A cost variance that occurs when the actual volume of production or sales negatively deviates from expected volumes, often leading to higher costs or lower profits.