When All Banks Have Zero Excess Reserves to Start and You

question 101

Multiple Choice

When all banks have zero excess reserves to start and you write a cheque that is deposited in another bank,it is true that

• A)the system will still have the same amount of reserves.
• B)the system will have increased its reserves.
• C)the system will have decreased its reserves.
• D)two banks will now have positive excess reserves.

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Definitions:

Maintenance Costs

refer to expenses incurred to keep machinery, equipment, and facilities in working order, ensuring operational efficiency.

Labor Hours

A measure of the amount of work performed, calculated by multiplying the number of workers by the number of hours each works.

Milling Department

A division within a manufacturing setup where milling processes are carried out, often involving cutting, shaping, drilling, or finishing products or components.

Direct Method

A cost allocation method used in cost accounting that directly assigns all direct costs to specific cost objects, such as products or services, without using any allocation for indirect costs.