The Simple Deposit Multiplier Is Larger Than the Money Multiplier

question 38

True/False

The simple deposit multiplier is larger than the money multiplier.

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Definitions:

Accruals

Accounting adjustments for revenues that have been earned but not yet received, or expenses that have been incurred but not yet paid.

EBITDA Coverage Ratio

A financial ratio that measures a company's ability to pay off its operating expenses and debts with its EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).

Debt Ratio

A financial ratio that compares a company’s total debt to its total assets, indicating the proportion of a company's assets that are financed by debt.

TIE Ratio

The times interest earned ratio, a financial metric measuring a company's ability to meet its debt obligations based on its current income.