What Is the Average Daily Reserve Required to Be Held

question 27

Multiple Choice

What is the average daily reserve required to be held by the bank for their demand deposits during the maintenance period? Suppose that the rules require no reserves for the first $11.5 million, 3 percent for amounts between $11.5 million and $71.0 million, and 10 percent thereafter.

• A)$24.285 million.
• B)$28.862 million.
• C)$29.555 million.
• D)$31.561 million.
• E)$32.069 million.

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Definitions:

Capital/Labor Intensity

A measure of the ratio of capital to labor in the production process, indicating whether an economy or sector relies more on capital investment or labor.

Corporate Profits Tax

A tax imposed by governments on the income earned by companies and corporations.

Labor Supply

The total amount of hours employees are ready and capable of working for a specified rate of pay.

Payroll Tax

A tax imposed on employers or employees, and is typically calculated as a percentage of the salaries that employers pay their staff.