The Reserve Requirement Ratio Is Equal to

question 280

Multiple Choice

The reserve requirement ratio is equal to

• A)required reserves divided by excess reserves.
• B)legal required reserves times the deposit multiplier.
• C)total checkable deposits times the deposit multiplier.
• D)total checkable deposits times the excess reserve ratio.
• E)legal required reserves divided by total checkable deposits.

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Definitions:

Expense Accounts

Accounts in the general ledger representing the various costs incurred by a company in the course of its operations, excluding product cost.

Accrual Method

An accounting technique that records revenues and expenses when they are incurred, regardless of when cash transactions occur.

Reversing Entries

An accounting method used to reverse journal entries, typically at the beginning of a new accounting period, to cancel adjustments made in the previous period.

Revenue Accounts

Accounts that track the income generated by a company from its normal business operations or other activities.