The Percentage of Deposits That Must Be Held as Reserves

question 57

Multiple Choice

The percentage of deposits that must be held as reserves is called

• A) the bank reserve percentage
• B) the required reserve ratio
• C) the excess reserve ratio
• D) the fractional reserve percentage

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Definitions:

Unrealized Profits

Profits that have been generated on paper through investments and other financial instruments but have not yet been realized through actual transactions.

Journal Entry

A recorded transaction in the financial accounting system, documenting the debits and credits necessary to maintain the balance sheet's integrity.

Inventory

Items that a company holds for the purpose of selling in the normal course of business, or materials used in the production of goods to be sold.

Dividends

Funds disbursed by a company to its stockholders, typically from earnings.