Refer to the Information Below

question 50

Multiple Choice

Refer to the information below.The maximum amount by which the chartered banking system can expand the supply of money by lending is about:
Consolidated balance sheet for the chartered banking system.Assume the desired reserve ratio is 30 percent.All figures are in billions.

• A) $27 billion.
• B) $23.1 billion.
• C) $30 billion.
• D) $15 billion.

---

Definitions:

Variable Administrative Expense

Indirect costs that change in proportion with the level of a company’s production or sales activities.

Fixed Administrative Expense

Expenses that do not change with the level of production or sales over a certain period, related to the administration of a business.

Contribution Format

An income statement format that separates fixed and variable costs to show the contribution margin.

Contribution Format

A type of income statement that separates variable costs from fixed costs, highlighting the contribution margin.