If Many Banks Fail, This Is Likely To

question 73

Multiple Choice

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:

Estimated Cost

An approximation of the financial expenditure associated with a project or production.

Ending Inventory

The final value of goods available for sale at the end of an accounting period after subtracting the cost of goods sold.

Retail Method

A pricing strategy used in retail to maintain a consistent profit margin by marking up goods based on their wholesale cost.

Retail Method

An accounting method used to estimate ending inventory and cost of goods sold by calculating a cost-to-retail percentage and applying it to the retail price.