Based on Historical Observations, If Many Banks Fail, This Is

question 52

Multiple Choice

Based on historical observations, if many banks fail, this is likely to:

• A)cause surviving banks to lower their ratios of reserves to deposits.
• B)cause surviving banks to raise their ratios of reserves to deposits.
• C)have no effect on the ratio of reserves to deposits in surviving banks.
• D)cause surviving banks to hold less currency.

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Definitions:

Consolidated Financial Statements

Financial statements that aggregate the financial information of a parent company and its subsidiaries, presenting it as if the group were a single entity.

Gross Profit

The financial gain obtained after subtracting the cost of goods sold from the total revenue generated from sales.

Voting Stock

Shares that give the shareholder the right to vote on company matters, such as electing directors or approving corporate policies.

Consolidations Under IFRS

The process of merging the financial results of subsidiary companies with those of the parent company according to the International Financial Reporting Standards.