The Currency Deposit Ratio,c,is 0

question 83

Multiple Choice

The currency deposit ratio,c,is 0.10.The reserve requirement,rr,is 0.08.The excess reserve ratio,e,is 0.05.What is the size of the money multiplier?

• A)4.70
• B)4.78
• C)4.75
• D)4.00

---

Definitions:

Permanent Accounts

Accounts that are not closed at the end of the accounting period, hence carry their balances over into the next period; these include asset, liability, and equity accounts.

Temporary Accounts

Accounts that are closed at the end of each accounting period, including revenue, expense, and dividend accounts.

Adjusting Entry

A journal entry made at the end of an accounting period to update account balances before preparing financial statements.

Unearned Service Revenue

Represents payments received for services that have not yet been performed or delivered, classified as a liability on the balance sheet.