Which of the following statements is (are) CORRECT?The higher the cash withdrawals by customers, the lower is the deposit creationO a.b. The Bank of Canada cannot fully control the reserve ratio and the currency ratioС.The higher the reserve ratio, the lower is the deposit creationd. All of the answers are correct

The answer is - d. All of the answers are correct.

Which of the following statements is (are) CORRECT? a. The higher the cash withdrawals by customers, the lower is the deposit creation O b. The Bank of Canada cannot fully control the reserve ratio and the currency ratio С. The higher the reserve ratio, the lower is the deposit creation O d. All of the answers are correct

Which of the following statements is (are) CORRECT? a. The higher the cash withdrawals by customers, the lower is the deposit creation O b. The Bank of Canada cannot fully control the reserve ratio and the currency ratio С. The higher the reserve ratio, the lower is the deposit creation O d. All of the answers are correct

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Required Reserve and Excess Reserve Analysis

A required reserve is an amount of cash that banks must keep with themselves, which is certain percentage of the deposits made by their customers. Required reserve is a percentage of the bank's deposits that the respective bank must have on each overnight. The percentage rate is set and determined by the nation’s central bank. It is important to have such funds accumulated to meet its uncertain obligations, sudden liabilities and withdrawals. Required reserve is also known as reserve ratio. Reserve ratio is an important tool to control the money supply.

Question

Which of the following statements is (are) CORRECT?
The higher the cash withdrawals by customers, the lower is the deposit creation
O a.
b. The Bank of Canada cannot fully control the reserve ratio and the currency ratio
С.
The higher the reserve ratio, the lower is the deposit creation
d. All of the answers are correct

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