Use the Following to Answer Questions

question 252

Multiple Choice

Use the following to answer questions:
-(Table: Assets and Liabilities of the Banking System) Refer to Table: Assets and Liabilities of the Banking System.Suppose that the reserve ratio is 10% and the Bank of Canada sells $66 700 worth of Canadian Treasury bills to the banking system.If the banking system does NOT have any excess reserves,_____ will be _____ the money supply.

• A) $667 000;subtracted from
• B) $667 000;added to
• C) $250 000;subtracted from
• D) $250 000;added to

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Definitions:

Selling

The process of promoting and transferring ownership of a product or service to customers in exchange for money or value.

Administrative Expenses

Costs related to the general operation of a business, including salaries of executives, office supplies, and utilities.

Direct Labor

The wages paid to workers directly involved in the production of products or the delivery of services.

Planning Budget

A budget prepared at the beginning of the budgeting period, reflecting expected revenues and expenses based on forecasted levels of operations.