The Simple Deposit Multiplier Can Be Expressed as the Ratio

question 4

Multiple Choice

The simple deposit multiplier can be expressed as the ratio of the

• A)change in reserves in the banking system divided by the change in deposits.
• B)change in deposits divided by the change in reserves in the banking system.
• C)required reserve ratio divided by the change in reserves in the banking system.
• D)change in deposits divided by the required reserve ratio.

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Definitions:

Total Profit

The total earnings of a business after subtracting all costs, including both fixed and variable costs, from total revenue.

Average Total Cost

The total cost of production divided by the total quantity produced, including both fixed and variable costs.

Average Variable Cost

The total variable costs (costs that change with the level of output) divided by the quantity of output produced.

Losing Money

The process where expenses exceed revenues, resulting in financial loss for a business or individual.