Initially a Bank Has a Required Reserve Ratio of 10

question 83

Multiple Choice

Initially a bank has a required reserve ratio of 10 percent and no excess reserves.If $1,000 is deposited into the bank,then,ceteris paribus,

• A)This bank can increase its loans by $900.
• B)This bank can increase its loans by $1,000.
• C)Total reserves will increase by $900.
• D)Required reserves will increase by $1,000.

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Definitions:

Overapplied Overhead

A situation where the actual manufacturing overhead costs are less than the overhead allocated to products during a specific period.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products or job orders, estimated before the costs are actually incurred.

Actual Overhead

The real costs incurred for overhead in manufacturing or providing services, as opposed to budgeted or estimated overhead.

Cost Accounting System

A system of accounting for operations that captures and records all costs associated with production activities to evaluate efficiency and manage expenses.