Suppose the Desired Reserve Ratio Is 10 Percent

question 369

Multiple Choice

Suppose the desired reserve ratio is 10 percent.If the Commerce Bank has total deposits of $20,000,total assets of $10,000,and actual reserves of $8000,the amount of excess reserves is

• A)$2,000.
• B)$6,000.
• C)$800.
• D)$100.
• E)$0.

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Definitions:

Machine-Hours

A measure of production or work time, quantifying the number of hours a machine is operated in the production of goods.

Machining Department

A division within a manufacturing facility where machining processes such as cutting, shaping, or finishing materials into final products occur.

Customizing Department

A specialized division within a company that modifies products to meet specific customer requirements or preferences.

Predetermined Overhead Rate

A calculated rate intended for the allocation of manufacturing overhead to products, based on a specific activity or cost driver.