Suppose That While Vacationing in Switzerland, You Won 9,375 Swiss

question 125

Multiple Choice

Suppose that while vacationing in Switzerland, you won 9,375 Swiss francs, which is the equivalent of $8,000. When you return to the United States, you deposit the $8,000 into your checking account. If the required reserve ratio is 15 percent, this would increase your bank's

• A) liabilities by $8,000.
• B) excess reserves by $8,000.
• C) required reserves by $8,000.
• D) assets by $1,200.

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Definitions:

Accounts Receivable

Money owed to a company by its customers for products or services already delivered but not yet paid for.

Credit Sale

involves selling goods or services to a customer with payment to be received at a later date.

Indirect Cost

Expenses that are not directly attributable to a specific product, service, or project, such as utilities or rent for office space.