Macroeconomics Ch. 11

Refer to Table 13.2. With total reserves of $80,000 and a required reserve ratio of 25 percent, ABC Bank could support maximum transactions account balances of:

$ 320,000

Refer to Table 13.2. If ABC Bank has a required reserve ratio of 15 percent, it can legally increase its loans by a maximum of:

$ 50,000

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

A single bank with $20,000 of reserves and a reserve ratio of 5 percent could support total transactions account balances of at most:

$400,000.

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:

$45,000

If excess reserves are $30,000, demand deposits are $100,000, and the required reserve ratio is 15 percent, then total reserves are:

$45,000.

suppose a bank has $300,000 in deposits and a required reserve ratio of 15 percent. Then required reserves are: Selected Answer:

$45,000.

Suppose University Bank has zero excess reserves. If the required reserve ratio decreases, the

Bank will be able to make more loans.

Deposit creation occurs when:

Correct A bank lends money.

Initially a bank has a required reserve ratio of 20 percent and no excess reserves. If $5,000 is deposited into the bank, then ceteris paribus:

Correct This bank can increase its loans by $4,000.

The ratio of a bank's reserves to its total transactions deposits is known as the:

Reserve ratio.

Banks make loans to all of the following except:

The Federal Reserve for deposit creation.

If bank customers decided as a group to pay off their loans and do not take out any new loans, ceteris paribus: Selected Answer:

The money supply will decrease.

Excess reserves are:

Total reserves less required reserves.

Which of the following is a bank liability?

Transactions account balances