In the Simple Deposit Expansion Model, an Expansion in Chequable

question 73

Multiple Choice

In the simple deposit expansion model, an expansion in chequable deposits of $1000 when the desired reserve ratio is equal to 20 percent implies that the Bank of Canada ________.

• A) sold $200 in government bonds
• B) sold $500 in government bonds
• C) purchased $200 in government bonds
• D) purchased $500 in government bonds

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Definitions:

Variance Analysis

The process of analyzing the difference between planned and actual numbers in order to find discrepancies and their causes.

Formula Approach

A method that uses mathematical formulas to solve problems or make decisions.

Materials Price Variance

A measure of the difference between the actual cost of materials and the standard cost, used to assess purchasing efficiency.

Standard Price

The predetermined cost at which goods or services should be purchased or sold, often used as a benchmark for evaluating actual costs.