Increasing the Required Reserve Ratio Is

question 169

Multiple Choice

Increasing the required reserve ratio is

• A)a contractionary policy because it lowers the amount of total reserves in the banking system
• B)a contractionary policy because it lowers the amount of excess reserves in the banking system
• C)an expansionary policy because it raises the amount of total reserves in the banking system
• D)an expansionary policy because it raises the amount of excess reserves in the banking system
• E)an expansionary policy because it raises the amount of required reserves in the banking system

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Definitions:

Adjusted

The process of making modifications to financial statements or data to represent accurately the economic reality, often excluding one-time or non-recurring items.

Prepaid Rent

An asset account that represents rent payments made in advance of the rental period, which is then expensed during the period the space is occupied or used.

Rent Expense

The cost incurred by a company for leased property used in business operations over a specified period.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, representing the wear and tear, deterioration, or obsolescence of the asset.