The More Excess Reserves Banks Choose to Keep

question 246

Multiple Choice

The more excess reserves banks choose to keep

• A)the larger the deposit multiplier.
• B)the smaller the deposit multiplier.
• C)the higher the required reserve ratio.
• D)the lower the required reserve ratio.

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Definitions:

Salary Owed

The amount of payment due to employees for services rendered that has not yet been paid.

Accumulated Depreciation

The total amount of a tangible asset's cost that has been allocated as depreciation expense over the asset's useful life, reducing its book value on the balance sheet.

Balance Sheet

A statement that displays the financial condition of a company, detailing assets, liabilities, and the equity of its shareholders at a given time.

Profit Margin

A financial metric that measures the percentage of revenue remaining after all expenses, taxes, and costs have been deducted.