MACR MACRO MACOR CMAOR
The table gives the value of selected assets and liabilities of a commercial bank's T-account. What is the maximum amount of new loans the bank could lend with the given amounts of reserves?
$10,000
Based on the table above, what is the value of the monetary base?
$110million
A commercial bank is facing the conditions given above. If the reserve requirement is 12 percent and the bank does not sell any of its securities, the maximum amount of additional lending this bank can undertake is
$3,000
Assume that Atlantic National Bank has demand deposits of $100,000 and no excess reserves,and that the reserve requirement is 10 percent.A customer withdraws $5,000 from the bank.To meet the reserve requirement, the bank must increase its reserves by
$4,500
Assume that the reserve requirement is 20 percent. If a bank initially has no excess reserves and $10,000 cash is deposited in the bank, the maximum amount by which this bank may increase its loans is
$8,000
Which of the following would lead to an increase in nominal interest rates?
A contractionary monetary policy accompanied by an increase in the demand for money
Which of the following most undermines the ability of a nation's currency to store value?
A decrease in the purchasing power of the currency
A commercial bank's ability to create money depends on which of the following?
A fractional reserve banking system
Which of the following is NOT a function of fiat money?
A source of intrinsic value
An increase in the equilibrium nominal interest rate could be caused by which of the following changes?
An increase in real income
An increase in the price level will most likely cause which of the following?
An increase in the demand for money
Based on the balance sheets above for three different banks, which of the following is true, if the reserve requirement is 10 percent?
Bank B can increase its loans by $40.
With a constant money supply, if the demand for money decreases, the equilibrium interest rate and quantity of money will change in which of the following ways?
DE CREASE NO CHSANGEEEE
If the central bank raises the required reserve ratio in a banking system with limited reserves, the money multiplier and the money supply will change in which of the following ways?
DE CREASEEEEE
The table above shows the current entries in the T-account of XYZXYZ Bank. Kim purchases a bond issued by the central bank for $50,000 and pays for the bond by drawing on her company's account at XYZXYZ Bank. What is the effect of Kim's purchase of the bond on the required and excess reserves of XYZXYZ Bank and the total money supply?
DECREASE (all)
Which of the following would be included as a liability on a commercial bank's balance sheet?
Demand deposits
Which of the following will most likely occur in an economy if more money is demanded than is supplied?
Interest rates will increase.
Which of the following will occur in the money market when the aggregate price level increases?
The demand for money will increase and nominal interest rates will increase.
If there is an increase in nominal income, which of the following will most likely occur in the short run?
The demand for money will increase.
Which of the following is most likely to increase if the public decides to increase its holdings of currency?
The interest rate
Which of the following is true when interest rates rise?
The opportunity cost of holding cash increases.
Which of the following changes will necessarily occur as a result of an increase in the nominal interest rate?
The quantity of money demanded will decrease.
Expansionary fiscal policy will most likely result in
an increase in nominal interest rates
The amount of money that the public wants to hold in the form of cash will
decrease if interest rates increase
Commercial banks can create money by
lending excess reserves to customers
The money demand curve is downward sloping because
people hold less money as the opportunity cost of holding money rises
The demand for money increases when national income increases because
spending on goods and services increases
Pat deposits a portion of her wages into a personal savings account every week. The saved money can be considered to be primarily a
store of value
The demand curve for money shifts to the right when
the nominal gross domestic product increases
Banks create money when
they make loans
