If the Terms of the Trade Discount Are Listed 20/10/5

question 343

Multiple Choice

If the terms of the trade discount are listed 20/10/5, the number "5" represents

• A)5 percent of the suggested retail price that is available to the retailer to cover costs and provide a profit.
• B)5 percent of the suggested retail price that is available to the wholesaler to cover costs and provide a profit.
• C)5 percent of the suggested retail price that is available to the jobber to cover costs and provide a profit.
• D)5 percent of the suggested retail price that is available to the ultimate consumer.
• E)5 percent of the suggested retail price that is the profit margin to the manufacturer.

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Definitions:

Money Multiplier

The ratio of the amount of deposits created by banks to the amount of the central bank's monetary base that has been injected into the economy.

100-percent-reserve Banking

A banking system in which banks keep the full amount of their depositors' funds in reserve, meaning they do not loan out any of the deposits but instead hold 100% of deposited money.

Money Supply

The total amount of currency and monetary assets within an economy at a specific time.

Reserve Requirements

Regulations set by central banks determining the minimum amount of reserves that banks must hold against deposits, used to control the money supply.