Which of These Is Not a Likely Result If Banks

question 33

Multiple Choice

Which of these is not a likely result if banks hold onto excess reserves?

• A)The economy may enter into a recession.
• B)Demands for loans may increase, but lending will be insufficient.
• C)Demand for loans will increase, and business activity will increase.
• D)Consumers and businesses will not be able to get loans as easily as before.

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Definitions:

Traditional Costing Method

A cost accounting method that assigns overhead costs to products based on a predetermined overhead rate.

Direct Labor-Hours

A measure representing the total hours worked by employees directly involved in the production of goods or services.

Unit Product Cost

Unit product cost is the total expense incurred to produce, store, and sell one unit of a product.

Overhead Applied

The allocation of overhead costs to specific jobs or production units based on a predetermined rate or method.