If the Required Reserve Ratio Is 10 Percent,an Increase in Bank

question 213

Multiple Choice

If the required reserve ratio is 10 percent,an increase in bank reserves of $1,000 can support an increase in checking account deposits (including the original deposit) in the banking system as a whole of up to

• A)$100.
• B)$1,000.
• C)$10,000.
• D)$100,000.

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Definitions:

Share Exchange

A transaction where shares of one company are exchanged for shares of another, typically as part of mergers or acquisitions.

Hostile Takeover

A type of acquisition where one company attempts to take control of another without the consent or cooperation of the target company's management or board.

Depreciable Assets

Long-term assets, such as buildings or equipment, whose cost is allocated over the useful life of the asset reflecting wear and tear or obsolescence.

Income Tax Impact

The effect of income tax laws on an entity's financial results, including how taxes influence net income or loss.