Changes in Reserve Requirements Directly and Immediately Affect

question 3

Multiple Choice

Changes in reserve requirements directly and immediately affect

• A)the monetary base.
• B)banks' holdings of securities.
• C)the Fed's holdings of foreign exchange.
• D)the money multiplier.

---

Definitions:

Residual Income

The amount of income that an individual or business has after all personal debts and expenses, including the cost capital, have been paid.

Financial Performance

An indicator of how well an entity can use assets from its primary mode of business and generate revenues.

Residual Income

A measure of performance that calculates the income an investment generates above the minimum required return.

Net Operating Income

A measure of a company's profitability, calculated by subtracting operating expenses from operating income.