If the Simple Money Multiplier Is 5,the Required Reserve Ratio

question 145

Multiple Choice

If the simple money multiplier is 5,the required reserve ratio must be equal to _____.

• A)5 percent
• B)0
• C)10 percent
• D)50 percent
• E)20 percent

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Definitions:

Debits

Accounting entries that increase assets or expense accounts, or decrease liability, equity, or revenue accounts.

Credits

Accounting entries that increase liabilities or equity accounts, or decrease asset accounts.

Personal Equipment

Tangible items owned by an individual for personal use, not for business or commercial purposes.

Cash

Currency and other liquid instruments such as checks and bank deposits that are readily available for use in transactions and other immediate needs.