Table 14-1 -Refer to Table 14-1.Suppose a Transaction Changes a Bank's Balance

question 102

Multiple Choice

Table 14-1

-Refer to Table 14-1.Suppose a transaction changes a bank's balance sheet as indicated in the T-account,and the required reserve ratio is 10 percent.As a result of the transaction,the bank has excess reserves of

• A)$0.
• B)$400.
• C)$3,600.
• D)$4,000.

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Definitions:

Variable Cost

Outlays that shift in alignment with the quantity of output generated.

Discount Rate

The interest rate used to discount future cash flows of a financial instrument back to their present value, thus reflecting the cost of capital.

Initial Cost

The upfront expense incurred to purchase an asset or start a project, including all relevant expenses.

Cash Inflows

Money coming into a business, typically from operations, financing, or investing activities; crucial for maintaining liquidity.