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kenny6666 [7]
3 years ago
11

If the reserve requirement is 20% and commercial bankers decide to hold additional excess reserves equal to 5% of any newly acqu

ired checkable deposits, then the effective monetary multiplier for the banking system will be:
a. 3
b. 4
c. 5
d. 6
Business
1 answer:
coldgirl [10]3 years ago
8 0

Answer:

B) 4

Explanation:

the monetary multiplier before this newly acquired checkable deposit was 1 / required reserve ratio = 1 / 20% = 5. Since the banks decided to increase the reserve ration to 25%, then the money multiplier will decrease to 1 / 25% = 4.

The monetary multiplier shows the money creating effect of the fractional banking system. E.g. you deposit $1,000 at bank A. Bank A will lend $750 to Bill. Bill then purchases a bike from Tom and Tom deposits the $750 in bank B. Bank B will then lend $562.50 to Sarah. Sarah purchases a TV from Alex, and Alex deposits the money in bank C. Then bank C will lend $421 to Frank, and the cycle goes on.

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Jenks Company developed the following information about its inventories in applying the lower-of-cost-or-net-realizable-value (L
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Answer:

$365,000

Explanation:

The computation of the inventory reported on the balance sheet is shown below:

<u>Product                  Cost                NRV            Lower cost</u>

A                            $115,000         $125,000    $115,000

B                            $95,000          $75,000     $75,000

C                            $175,000         $180,000   $175,000

Total                                                                  $365,000

7 0
3 years ago
Which sentence best completes the diagram?
Sauron [17]

Answer:

The answer might be option no C

5 0
3 years ago
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A letter from Coulton Engineering Company dated September 12 is to be filed in the Coulton file. How should you arrange it in th
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<span>C. By date with the latest date in the front of the folder </span>
4 0
3 years ago
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2 years ago
South Carolina is facing budget cuts. The number of employees needs to be reduced over the next three years at all state agencie
choli [55]

<u>Answer:</u> This approach is called attrition.

<u>Explanation:</u>

Attrition is the process of reducing the workforce of the company due to various reasons. Here South Carolina has lot of budget constraints which forces the state to reduce the in take of new employees. This approach can also be called as hiring freeze so that the payroll can be reduced instead of doing layoffs.

The strength of the state is reduced in order to reduce the expenses and money pay outs. When there is a deficiency in the budgets actions have to be taken accordingly to minimize the effects.

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