Everything Else Held Constant,if the Sum of the Required Reserve

question 176

Multiple Choice

Everything else held constant,if the sum of the required reserve ratio and the excess reserve ratio is less than one,an increase in the currency-checkable deposit ratio will mean

• A)an increase in currency in circulation and an increase in the money supply.
• B)an increase in money supply but no change in reserves.
• C)a decrease in the money supply.
• D)an increase in currency in circulation but no change in the money supply.

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Definitions:

Straight-Line Method

A method of calculating depreciation by evenly spreading the cost of an asset over its useful life.

Semiannual Interest

Refers to the payment of interest on a loan or financial instrument every six months.

Bond Premium

The excess value of a bond above its face value in the marketplace.

Straight-Line Method

A depreciation method that allocates an equal amount of the depreciable cost of an asset to each year of its useful life.