If Excess Reserves Are $10 Million,(total)reserves Are $14 Million,and the Required

question 16

Multiple Choice

If excess reserves are $10 million,(total) reserves are $14 million,and the required reserve ratio is 10%,then required reserves equal ________________ and checkable deposits equal ____________________.

• A) $4 million; $40 million
• B) $40 million; $4 million
• C) $24 million; $240 million
• D) $7 million; $70 million

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Definitions:

Net Income

The end profit of a company after revenue has been reduced by expenses and taxes.

Revenues Over Expenses

The surplus resulting when total revenues exceed total expenses in a business, indicating profitability.