Which of the Following Is True

question 98

Multiple Choice

Which of the following is true?

• A)Actual reserves equal required reserves minus excess reserves.
• B)The predominant liability of virtually all banks is loans.
• C)The smaller the required reserve ratio, the larger the money multiplier.
• D)If some banks choose not to lend all of their excess reserves, the total amount of money created by an initial cash deposit will be larger.
• E)Required reserves equal deposits times money multiplier.

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Definitions:

Inventory Value

The reported value of a company's goods or materials that have not yet been sold, calculated based on the cost of acquisition or manufacturing.

Cash Balances

Cash Balances are the amount of cash or cash equivalents that a company or an individual holds.

Transactions

The action of buying or selling in a business context, or the records of these actions.

Business Operations

The activities that businesses engage in on a day-to-day basis to increase the value of the enterprise and earn a profit.