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:

Periodic Inventory System

An inventory accounting system where updates to inventory levels are made on a periodic basis, rather than continuously, often at the end of an accounting period.

Cost Of Goods Sold

The direct costs attributable to the production of goods sold by a company.

Merchandising Business

A merchandising business buys goods in their finished form for the purpose of resale without further processing, making profit through buying and selling activities.

Statement Of Stockholders' Equity

A financial document that shows the changes in the value of a company's equity over a reporting period, including shares issued, dividends, and earnings.