Which of the Following Statements Is True

question 137

Multiple Choice

Which of the following statements is true ?

• A) The simple money multiplier equals the reciprocal of the required reserve ratio.
• B) Required reserves is the minimum balance that the Fed requires a bank to hold in vault cash or on deposit with the Fed.
• C) The Discount rate is the interest rate charged banks for loans from the Fed.
• D) Excess reserves equal total reserves minus required reserves.
• E) All of the above.

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Definitions:

Contribution Margin

The amount remaining from sales revenues after all variable expenses have been deducted.

Fixed Costs

Expenses that do not change in proportion to the activity of a business, i.e., they remain constant regardless of the level of production or sales.

Discontinue Department

The process or decision to eliminate a particular department or business unit that is not performing up to expectations or aligning with company strategy.

Advanced Level

Refers to a stage or qualification that is considered to be more complex and challenging than basic or intermediate levels.