If the Target Reserve Ratio in the Banking System Is

question 106

Multiple Choice

If the target reserve ratio in the banking system is 10%,there is no cash drain,and there are no excess reserves,a new deposit of $1 will lead to an eventual expansion of the money supply of

• A)$0.01.
• B)$0.10.
• C)$1.00.
• D)$10.00.
• E)$100.00.

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Definitions:

Consolidated Stockholders' Equity

The total amount of equity attributed to owners of a parent company, after adding the equity of all subsidiaries and eliminating inter-company transactions.

Voting Stock

Refers to shares that give the shareholder the right to vote on company matters, such as electing the board of directors.

Consolidated Income Tax Return

A single income tax return filed by a parent company and its subsidiaries, allowing for the consolidation of taxable income and tax payments to simplify tax reporting.

Significant Influence

This refers to the power to participate in the financial and operating policy decisions of an investee but is not control or joint control over those policies.