Answer: B. 1/R, where R represents the reserve ratio for all banks in the economy.
Explanation:
The Money Multiplier is the money that Banks generate given a certain RESERVE REQUIREMENT/RATIO.
A Reserve Requirement is money that the Central Bank requires that Banks do not loan out and instead keep in reserve.
For example, if the reserve rate is 10% and a bank has $10 they can only loan out $9.
Assuming they loan out $9 then they created $19 in the economy because their customers still own the original $10 but now they have also given loans of $9. The people who take the loans then deposit it in another bank. That bank would keep $0.90 in reserve and loan out $8.10 meaning that $27.10 now exists in the economy.
The process goes on and on until it gets to $100.
A simpler way to get to the final figure is to divide 1 by the reserve requirement = 1/r which is the money multiplier.
Using the above example, that would be 1/0.1 which is 10.
Multiplying this 10 by the initial deposit of $10 will give you that same $100.
Absolute
Explanation:
Pure risk is call absolute risk because it is a category that is beyond human control.
Answer:
The correct answer is A
Explanation:
A substantial understatement may occur when tax return is understated by an amount greater than 10% of the tax required to be shown on the tax return.
Example: If a tax payer that is suppose to report a $6000 tax due and choose to report a $2000 instead, to know if a penalty will be charged or not it has to be greater than 10% of the amount which is suppose to be reported (i.e $6000 x 10% = 600) . therefore in the case shown above the penalty will be applied
Answer:
Your total monthly payment would be 1,500 dollars.
Explanation:
Not the place to be asking but at this point they are pretty well known.
