A Run on a Bank May Occur If

question 107

Multiple Choice

A run on a bank may occur if

• A)depositors withdraw some funds to invest in the stock market.
• B)required reserves are increased.
• C)interest rates are raised.
• D)depositors lose confidence in the bank and attempt to withdraw all their funds.
• E)All of these responses are correct.

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Definitions:

Weighted-Average Method

An inventory costing method that calculates the cost of ending inventory and the cost of goods sold based on the average cost of all units available for sale during the period.

Equivalent Units

A concept in cost accounting that converts partially completed goods into a number of completed units for inventory valuation.

Materials

Raw inputs or supplies that are converted into finished products through the manufacturing process.

FIFO Method

"First In, First Out", an inventory valuation method where the first items placed into inventory are the first sold, affecting the cost of goods sold and inventory value.