304 q4
) If a bank has $10 million of checkable deposits, a required reserve ratio of 10 percent, and it holds $2 million in reserves, then it will not have enough reserves to support a deposit outflow of
A) $1.2 million.* B) $1.1 million. C) $1 million. D) $900,000
With a 10% reserve requirement ratio, a $100 deposit into New Bank means that the maximum amount New Bank could lend is
A) $90.* B) $100. C) $10. D) $110
When $1 million is deposited at a bank, the required reserve ratio is 20 percent, and the bank chooses not to hold any excess reserves but makes loans instead, then, in the bank's final balance sheet,
A) the assets at the bank increase by $800,000. B) the liabilities of the bank increase by $1,000,000.* C) the liabilities of the bank increase by $800,000. D) reserves increase by $160,000.
When a $10 check written on the First National Bank of Chicago is deposited in an account at Citibank, then
A) the liabilities of the First National Bank increase by $10. B) the reserves of the First National Bank increase by $ 10. C) the liabilities of Citibank increase by $10.* D) the assets of Citibank fall by $10
Bank capital is equal to ________ minus ________.
A) total assets; total liabilities* B) total liabilities; total assets C) total assets; total reserves D) total liabilities; total borrowings
