Suppose the Excess Reserves in Toronto Dominion Bank Increase by $700.Given

question 88

Multiple Choice

Suppose the excess reserves in Toronto Dominion Bank increase by $700.Given a desired reserve ratio of 2.5% and no cash drain,the maximum change in deposits for the entire banking system would be

• A)$682.50.
• B)$700.00.
• C)$17 500.00.
• D)$28 000.00.
• E)$70 000.00.

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Definitions:

Variable Cost

Expenses that vary directly with the amount of output or the scale of operations.

Product Costs

The costs directly associated with the production of goods or services, including raw materials, labor, and manufacturing overhead.

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, the government, and other interested parties.

Units

A measure of quantity, such as items or pieces, used in production and inventory contexts.