Answer the Question on the Basis of the Following Table

question 79

Multiple Choice

Answer the question on the basis of the following table for a commercial bank or thrift: $\begin{array}{c}\begin{array}{c}(1) \\\text {Legal Reserve}\\\underline{\text {Ratio (\%) }}\\10 \\20 \\25 \\30\end{array}\begin{array}{c}(2) \\\text {Checkable}\\\underline{\text {Deposits}}\\ \$ 40,000 \\40,000\\40,000\\40,000\end{array}\begin{array}{c}(3) \\\text {Actual}\\\underline{\text {Reserves}}\\\$ 10,000 \\10,000\\10,000\\10,000\end{array}\end{array}$

Refer to the table.If the legal reserve ratio falls from 25 percent to 10 percent,excess reserves of this single bank will:

• A) rise by $6,000 and the monetary multiplier will increase from 4 to 10.
• B) rise by $60,000 and the monetary multiplier will increase from 4 to 10.
• C) fall by $6,000 and the monetary multiplier will decline from 30 to 10.
• D) fall by $2,000 and the monetary multiplier will decline from 10 to 4.

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Definitions:

Spending Variance

The discrepancy between the budgeted or forecasted expenditure and the actual amount spent.

Client-Visits

The number of times clients come into contact with the service provider, which could be in person or virtually, within a given period.

Medical Supplies

Items used in medical care, including tools, equipment, and consumables, essential for diagnosing, preventing, and treating illnesses.

Units

A measurement of quantity, used in various contexts to indicate the amount, volume, or number of items or elements.