Other Things Being Equal, If the Reserve Ratio Is Raised

question 400

Multiple Choice

Other things being equal, if the reserve ratio is raised from 10 percent to 25 percent

• A) minimum potential value of the money multiplier rises from 0.10 to 0.25.
• B) minimum potential value of the money multiplier falls from 10 to 5.
• C) maximum potential value of the money multiplier rises from 10 to 25.
• D) maximum potential value of the money multiplier falls from 10 to 4.

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Definitions:

Net Income

The total profit of a company after all expenses and taxes have been deducted from gross income.

Dividends Paid

The total amount of dividends that a corporation has paid out to its shareholders during a specific period, typically expressed on a per share basis.

Fixed Asset Capacity

The maximum output or production level that a company can sustain with its existing fixed assets, such as machinery and equipment.

Current Sales

Sales made and completed within a specific accounting period, emphasizing the company's operational performance.