Suppose That from a New Checkable Deposit,First National Bank Holds

question 47

Multiple Choice

Suppose that from a new checkable deposit,First National Bank holds eight million dollars on deposit with the Federal Reserve,one million dollars in required reserves,and faces a required reserve ratio of ten percent. Given this information,we can say First National Bank has ________ million dollars in excess reserves.

• A)two
• B)eight
• C)nine
• D)ten

---

Definitions:

Degree Of Operating Leverage

A measure of how much a company's operating income can increase with a given increase in sales. It highlights the sensitivity of a company's operating income to changes in sales.

Percentage Change

A mathematical calculation that shows how much a quantity has increased or decreased as a percentage of its previous value, often used to measure growth rates or changes in financial metrics.

OCF

Operating Cash Flow, which is the cash generated by normal business operations.

Sales Quantity

The total number of units of a product or service sold during a specific period of time.