A required reserve ratio of 7 percent gives rise to a simple deposit multiplier of 14.29.
<h3>What is reserve ratio?</h3>
The reserve ratio is the percentage of reservable liabilities which commercial banks must keep rather than lend or invest. This is a requirement set by the country's central bank, which is the Federal Reserve in the United States. It is also referred to as the cash reserve ratio.
Some key points related to reserve ratio are-
- The reserve requirement is the minimum amount of deposits that a bank must hold, and it is sometimes used interchangeably with the reserve ratio.
- Regulation D of the Federal Reserve Board establishes the reserve ratio.
- Regulation D established uniform reserve requirements with all deposit accounts with transaction accounts and necessitates banks to provide the Federal Reserve with regular reports.
- Suppose the Federal Reserve determined that the reserve ratio should be 11%. This means that if a bank has $1 billion in deposits, it must keep $110 million in reserve ($1 billion x.11 = $110 million).
To know more about reserve ratio, here
brainly.com/question/13758092
#SPJ4
Answer:
The answer is D. Deflating nominal income for inflation.
Explanation:
Real income is how much money an individual or entity makes after accounting for inflation. it is the income of an individual or a nation after adjusting inflation. It is calculated by dividing nominal income by the price level.
Hence we can say real income is determined by Deflating nominal income for inflation
An
example of a case where a cost and revenue function do not have a break
even point includes, when the profit margin is larger than the losses
of the business.
