Assume That the Reserve Requirement Is 20

question 195

Multiple Choice

Assume that the reserve requirement is 20%. A bank has $20 billion in demand deposits. How much money does the bank have to keep in reserves?

• A) $20 billion
• B) $10 billion
• C) $4 billion
• D) $2 billion

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Definitions:

Inventory Turnover Ratio

A financial metric that indicates how many times a company's inventory is sold and replaced over a certain period, reflecting the efficiency of inventory management.

Cost Of Goods Sold

An accounting term representing the direct expenses related to the production of goods sold by a company, including material and labor costs.

Inventory

The total amount of goods or materials a business has in stock at any given time, used for production or sales.

Accounting Information

It refers to financial data about a business or individual's economic activities, used to make economic decisions.