Suppose the required reserve ratio is 10% and a bank receives a $10 million deposit into a checking account. By how much will deposits change in the banking system? (assume that the banking system currently has no excess reserves) Select one: $100 million. O $90 million. $10 million. O $110 million.
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- Question 8 If reserves increase by $5 million, what is the difference in the resulting change in checkable deposits when the required reserve ratio is 12.5 percent compared to when it is 10 percent? $12.5 million $10 million O $2.5 million 1 pts O$100 millionAssume that a bank receives a deposit of $1,000 in cash, puts aside $200 as required reserves, and makes a loan of $800, these transactions imply that: O the money supply by the whole banking system can increase by $1,000. O the money supply by the whole banking system can increase by $4,000. the money supply by the whole banking system can increase by $8,000. O the money supply by the whole banking system can increase by $5,000.What is the difference between a debit card and a credit card? A purchase with a debit card you never have to pay for. A credit card comes directly from your checking account. O A debit card purchase comes directly from your checking account. A purchase with a credit card you never have to pay, ever. O A debit card has your purchases come directly from your checking account. A credit card collects the amount that you spend the entire month. If you do not pay the entire balance, you will have to pay interest. O A debit card collects the amount you spend over the month and sends you a bill. If you do not pay the whole bill, you have to pay interest. A credit card purchase comes directly from your checking account.
- 1. Legal reserve of a commercial bank A consists of cash in vault and deposits in the central bank. A question requiring a 'True/False' answer.(Required) O True O False 2.Required reserve can be used to make loans, purchase securities. A question requiring a 'True/False' answer.(Required) O True O False 3. An individual bank can create a multiple amount of deposit money from any given injection of reserves by using its excess reserve to make loans. A question requiring a 'True/False' answer.(Required) O True O False 4.If the Fed set the required reserve requirement ratio to be 0.02, bank A wishes to maintain 0.03 dollar in excess reserve for every 1 dollars in transaction deposit. What is the deposit multiplier? | (Required) If bank A found themselves with 10 in excess reserve, what is the maximum amount of new deposits (loan) created by the banking system? (Required)Table 14 shows the balance sheet of the Tenth National Bank Assets Liabilities Reserves $517 Deposits $4,136 Loans $3,619 Total: $4,136 Total: $4,136 Refer to Table 14. Assume that this bank lends out its entire excess reserves. If Jerry deposits $426 of cash in a checking account in the Tenth National Bank, what's the maximum change in the money supply in the economy? O $2,982 G O $3,408 O $3,696 O $4,200 O $4,136Question 15 Table 29-4 Reserves Loans Assets Bank of Smileville O c. 13.4 percent. O d. 8.7 percent. $4,000 Deposits 46,000 Liabilities $50,000 Refer to Table 29-4. The Bank of Smileville's reserve ratio is O a. 8.0 percent. b. 11.3 percent.
- Robert needs to decide between buying a slate pool table for $1,800 or being able to go on a Canadian vacation for $1,000 and still having enough left over to buy a nonslate pool table for $800. Robert opts for the nonslate pool table and the Canadian vacation. Robert has used money in what ways in making his decision? O A. Medium of exchange and a standard unit of account. O B. Store of value and a standard unit of account. OC. Medium of exchange and a method to decrease deferred payments. O D. Medium of exchange and a store of value.If a bank uses $100 of excess reserves to make a new loan when the reserve ratio is 25 percent, what happens to the money supply in the very short term? O a. It decreases by $100. O b. It increases by $25. O C. It decreases by $25. O d. It increases by $100. Show Transcribed Text Suppose a bank has $200,000 in deposits and $150,000 in loans. What is its reserve ratio? O a. 1 percent O b. 5 percent O C. 10 percent O d. 25 percent Show Transcribed Text Which list ranks the Bank of Canada's monetary policy tools from most to least frequently used? O a. bank rate changes; open-market transactions; reserve requirement changes O b. bank rate changes; reserve requirement changes; open-market transactions O c. open-market transactions; bank rate changes; reserve requirement changes O d. open-market transactions; reserve requirement changes; bank rate changes0 Question 22 (use the Deposit Expansion Multiplier (DEM) formula) Using the Fractional Reserve banking system, if the reserve ratio is 6% and someone deposits $1,000 into his checking account, the banking system potentially can increase the money supply to O $16,750.25 O $16,666.66 $16,100 $16.230.66
- Cat bank has deposits of $800 million. It holds reserves of $20 million and government bonds worth $60 million. If the bank sells its loans at market value of $700 million, what will its total assets equal? O $780 million O $510 million O $80 million O $720 millionBanks create money by O a. buying U.S. government securities with cash. O b. printing money up to their required reserve limit. O c. creating deposits without limit. O d. making loans and creating deposits, a process that is limited by the size of banks' excess reserves. O e. printing dollar bills without limit."If the required reserve ratio is 20% and the current deposit is $50,000. Calculate the amount of new money created." O"$200,000" O "$250,000" O"$10,000" "$40,000"