If the Currency-Deposit Ratio Equals 0

question 18

Multiple Choice

If the currency-deposit ratio equals 0.5 and the reserve-deposit ratio equals 0.1, then the money multiplier equals:

• A)0.6.
• B)1.67.
• C)2.0.
• D)2.5.

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Definitions:

Carrying Amount

The book value of an asset or liability, calculated as its original cost adjusted for factors such as depreciation or amortization.

Net Identifiable Assets

The aggregate of a company's assets minus its liabilities, exclusive of goodwill and other intangible assets.

Loss on Disposal

The financial loss that occurs when the selling price of an asset is less than its carrying amount at the time of disposal.

Carrying Amount

Carrying amount, also known as book value, is the value of an asset as recorded in a company's books or financial statements, after accounting for depreciation and impairment losses.