The Larger the Reserve Requirement,the

question 176

Multiple Choice

The larger the reserve requirement,the

• A)larger the potential deposit multiplier.
• B)smaller the potential deposit multiplier.
• C)more profitable the banks will be.
• D)larger the proportion of an additional deposit that is available to the bank for the extension of additional loans.

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Definitions:

Net Sales

The total revenue a company generates from sales after subtracting returns, allowances, and discounts.

Increase in Accounts Receivable

A situation where the amount of money owed by customers to a company grows due to sales on credit outpacing payments received.

Credit Sales

Sales made by a business where the payment is to be received at a later date, extending credit to customers.

Accounts Receivable

Money owed to a business by its clients or customers for goods or services that have been delivered but not yet paid for.