The Greater the ________,The Greater the Extent to Which the Banking

question 50

Multiple Choice

The greater the ________,the greater the extent to which the banking system can expand the money supply.

• A) legal reserve requirements
• B) amount of reserves the public removes from the banking system in form of cash
• C) willingness of banks to hold excess reserves
• D) reciprocal of the required ratio of reserves to deposits
• E) number of independent banks in the system

---

Definitions:

Accounts Receivable

Money owed to a company by its clients or customers for goods or services that have been delivered but not yet paid for.

Accounts Payable

Money owed by a company to its creditors for goods and services that have been delivered but not yet paid for.

Accounting Equation

A fundamental principle in accounting that states assets equal liabilities plus owner's equity.

Equipment

Physical assets used in the operation of a business, such as machinery, computers, and furniture.