Suppose That a Bank Has $8,000 in Checkable Deposits and the Required

question 209

Multiple Choice

Suppose that a bank has $8,000 in checkable deposits and the required reserve ratio is 0.2.If actual reserves equal $3,000,then excess reserves equal

• A)$1,600
• B)$1,400
• C)$2,400
• D)$5,000
• E)zero

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Definitions:

Accounts Payable

Liabilities of a business that are due to be paid to creditors within a short period of time, usually one year.

Spreadsheet Method

A technique utilizing spreadsheet software to organize, analyze, and manage data, often for budgeting, planning, and decision-making purposes.

Indirect Method

The indirect method is a way to calculate cash flow from operations by adjusting net income for changes in non-cash accounts and non-operating items.

Journal

The initial record in which the effects of a transaction are recorded.