Econ Chapter 13 Banks Exam

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suppose a bank has $5,000,000 in deposits, a required reserve ratio of 20 percent, and total reserves of $1,000,000. Then the bank has excess reserves of

$0

suppose a banking system has $100,000 in deposits, a required reserve ratio of 25 percent, and total bank reserves for the whole system of $25,000. Then the potential increase in deposit creation for the whole system is equal to

$0

suppose a banking system has $200 million in deposits, a required reserve ratio of 10 percent, and total bank reserves of $35 million. Then the potential increase in deposit creation for the whole banking system is equal to

$150 million

suppose a bank has $200,000 in deposits, a required reserve ratio of 10%, and a bank reserves of $45,000. then this bank can make new loans in the amount of

$25,000

suppose a bank has $200,000 in deposits and a required reserve ratio of 15 percent. Then required reserves are

$30,000

suppose a bank has $2 million in deposits, a required reserve ratio of 10 percent, and total reserves of $500,000. Then it has excess reserves of

$300,000

suppose a bank has $1 million in deposits, a required reserve ratio of 25 percent, and total reserves of $600,000. Then it has excess reserves of

$350,000

suppose a banking system has $120 million in deposits, a required reserve ratio of 20 percent, and total bank reserves for the whole system of $100 million. Then the potential increase in deposit creation for the whole system is equal to

$380 million

if the banking system has demand deposits of $200,000, total reserves equal to $60,000, and a required reserve ratio of 25%, the banking system can increase the volume of loans by a maximum of

$40,000

suppose a bank has $300.000 in deposits and a required reserve ratio of 15%. Then required reserves are

$45,000

suppose a banking system has a required reserve ratio of 0.10. How much can the money supply increase in response to a $500 increase in excess reserves for the whole banking system?

$5,000

if the banking system has demand deposits of $100,000, total reserves equal to $15,000, and a required reserve ratio of 10 percent, the banking system can increase the volume of loans by a maximum of

$50,000

suppose a bank has $500,000 in deposits and a required reserve ratio of 10 percent. Then required reserves are

$50,000

suppose a bank has $200,000 in deposits, a required reserve ratio of 15 percent, and total reserves of $100,000. Then it has excess reserves of

$70,000

given a required reserve ratio of 0.25, what is the maximum amount by which the money supply can increase in response to a $200 million increase in excess reserves for the whole banking system?

$800 million

if the banking system has a required reserve ratio of 10% , the money multiplier is

10.0

what is the value of the money multiplier when the required reserve ratio is 11%: 7.5%:

11%: 9.09 7.5%: 13.33

if the banking system has a required reserve ratio of 25%, the money multiplier is

4.0

if the banking system has a required reserve ratio of 20 percent, the money multiplier is

5.0

using the information in the text, of the following three forms of money: cash, checking accounts, savings accounts, which is the largest component of

M1: checking accounts M2: savings accounts

deposits occur when

a bank lends money

suppose university bank has zero excess reserves. if the required reserve ratio decreases, the

bank will be able to make more loans

the banking system can lend the sum of its excess reserves because

banks are required to keep only a fraction of deposits on reserve

An essential function for a bank is to

create money through lending

one of the main functions of banks is

creating money

a bank may lend an amount equal to its

excess reserves

the required reserve ratio is the

fraction of total deposits banks must hold.

the original banker in each town were the

goldsmiths

the minimum amount of reserves a bank is required to hold is known as

required reserve ratio

the ratio of a banks total reserves to its total transactions deposits is known as the

reserve ratio

the term fractional reserves refers to

reserves being a small fraction of total transactions account balances.

which of the following insures deposits at banks

the FDIC

initially a bank has a required reserve ratio of 20% and no excess reserves. if $5,000 is deposited into the bank, the initially, ceteris paribus,

the bank can increase its loan by $4,000

which of the following is not considered to be a private depository institution

the federal reserve

which of the following sets the legal minimum reserve ratio

the federal reserve

initially a bank has a required reserve ratio of 15 percent and no excess reserves. If $10,000 is deposited in the bank, then, ceteris paribus,

this bank can increase its loans by $8,500

excess reserves are

total reserves less required reserves


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