A Bank Is Reserve Deficient When

question 117

Multiple Choice

A bank is reserve deficient when

• A) its reserves fall short of the level determined by the required reserve ratio.
• B) its excess reserves are greater than its required reserves.
• C) its required reserves are greater than its excess reserves.
• D) it purchases government securities from the Fed.

Understand the concepts of income redistribution and its impact on societal welfare.

Identify the arguments for and against income redistribution.

Differentiate between various theories of justice (Utilitarian, Rawlsian) regarding income distribution.

Recognize the economic and political considerations in implementing income redistribution policies.

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Definitions:

Fixed Expenses

Costs that do not change with the level of production or sales volume, such as rent and salaries.

Variable Expenses

Expenses that vary directly with the level of production or sales volume, such as raw materials and direct labor costs.

Net Income

The profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Total Contribution Margin

The difference between total sales revenue and total variable costs, representing the amount available to cover fixed expenses and generate profit.