Suppose That from a New Checkable Deposit,First National Bank Holds

question 52

Multiple Choice

Suppose that from a new checkable deposit,First National Bank holds two million dollars in vault cash,one million dollars in required reserves,and faces a required reserve ratio of ten percent. Given this information,we can say First National Bank has ________ million dollars on deposit with the Federal Reserve.

• A)one
• B)two
• C)eight
• D)ten

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Definitions:

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to products based on a specific activity base.

Machine-Hours

A measure of production output or capacity, indicating the total hours that machinery is operated over a specific period.

Fixed Overhead

Regular, unchanged costs incurred by a business for its operations regardless of varying levels of production, such as rent, salaries, and insurance.

Unused Capacity

The available resources or production capabilities that are not currently being utilized.