If the Required Reserve Ratio Is 20%,what Is the Simple

question 18

Multiple Choice

If the required reserve ratio is 20%,what is the simple deposit multiplier?

• A) 20
• B) 0.05
• C) 5
• D) 50
• E) 2

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Definitions:

Direct Method

A cash flow statement approach that lists major categories of gross cash receipts and payments, providing a clearer view of a company's cash flow from operational activities.

Cash Flow Statement

A financial report that provides aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given period.

Accrual-Basis Revenues

Earnings recorded when they are earned, regardless of when the cash payment is received, under the accrual method of accounting.

Balance Sheet

An accounting statement that itemizes the assets, liabilities, and equity held by shareholders of a company on a specific date.