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11111nata11111 [884]
3 years ago
14

The ______________ is too powerful to be changed very often because a small change is magnified throughout the banking system..

Business
1 answer:
Eduardwww [97]3 years ago
3 0

Answer:

The reserve ratio is too powerful to be changed very often because a small change is magnified throughout the banking system.

Explanation:

The reserve ratio by definition "is the amount of reservable liabilities that banks must hold instead than lend out or invest to any person or entity".

That represent an important concept in order to control the monetary policy for the economy any country and is very important when the governments wants to regulate the money supply.

We have a general rule that if the central bank of a country increase money supply in the economy,  then we need to be decrease the reserve ratio and vice versa.

The reserve ratio can be uses to control and manipulate the general conditions for all the banks in a country, because any change in the reserve ratio directly affect the banking system in all the conditions.

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Answer:

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Inventories are generally valued at lower of cost or market value.

In that, cost is considered:

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Since the Net Realizable Value is more than cost, replacement cost will not be considered.

Where NRV is less than cost, then replacement value is considered.

Here, Therefore inventory will be recorded as $22 at cost.

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