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:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its current assets.

Net Margin

A profitability metric calculated as net income divided by revenue, expressing the percentage of revenue that remains as profit after all expenses are deducted.

ISO 9000

A set of international standards on quality management and quality assurance developed to help companies effectively document the quality system elements required for maintaining an efficient quality system.

International Marketplace

The global economic environment in which businesses operate, allowing for the exchange of goods and services across national borders.