If the Reserve Ratio Is 5 Percent, Then $600 of Additional Reserves Can Create Up to

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6. xi. If the reserve ratio is v percent, then $1,000...

xi. If the reserve ratio is 5 pct, and so $1,000 of additional reserves can create upwardly to ... 1 reply below »

eleven. If the reserve ratio is 5 percent, and then $1,000 of additional reserves can create up to
$200 of new money.
$2,000 of new money.
$xx,000 of new money.
None of the above is correct.

Question 12. 12. Given the following data, what are the values of M1 and M2?

Small-scale time deposits	$1,300 billion
Demand deposits and other checkable deposits	$600 billion
Savings deposits	$1,500 billion
Money market mutual funds	$1,200 billion
Traveler'southward checks	$50 billion
Large fourth dimension deposits	$one,200 billion
Currency	$200 billion
Miscellaneous categories in M2	$l billion

M1 = $800 billion, M2 = $4,950 billion.
M1 = $250 billion, M2 = $half-dozen,050 billion.
M1 = $850 billion, M2 = $four, 900 billion.
M1 = $850 billion, M2 = $6,100 billion.

Question 13. 13. Tabular array 16-2 . An economy starts with $ten,000 in currency. All of this currency is deposited into a unmarried banking company, and the bank and so makes loans totaling $9,250. The T-account of the bank is shown below.

Avails	Liabilities
Reserves              $750	Deposits          $10,000
Loans                  nine,250

Refer to Table 16-2. The bank’s reserve ratio is

7.l percent.
8.12 percent.
92.l percent.
100 percent.

Question xiv. 14. If the reserve requirement is v per centum, a bank desires to hold no excess reserves, and it receives a new deposit of $400, it

must increase required reserves past $20.
volition initially see reserves increase by $400.
will be able to employ this eolith to make new loans amounting to $380.
All of the in a higher place are correct.

Question 15. 15. The money multiplier equals

one/R, where R represents the quantity of reserves in the economy.
one/R, where R represents the reserve ratio for all banks in the economy.
one/(one+R), where R represents the quantity of reserves in the economy.
one/(one+R), where R represents the reserve ratio for all banks in the economy.

Question 16. 16. If the coin multiplier is 2 and the Fed buys $50,000 worth of bonds, what happens to the money supply?

it increases by $100,000
it increases past $150,000
information technology decreases by $100,000
it decreases by $150,000

Question 17. 17. A bank has $10,000 in deposits and $8,000 in loans. It has loaned out all it tin given the reserve requirement. It follows that the reserve requirement is

2 percentage.
12.5 percent.
twenty per centum.
eighty percent.

Question eighteen. eighteen. What does the Fed auction at the Term-Auction Facility?

government bonds of a quantity it sets
government bonds with the quantity determined at the sale
loans of a quantity it sets
loans with the quantity determined at the auction

Question 19. 19. The managing director of the banking company where you work tells y'all that your bank has $5 meg in excess reserves. She also tells you lot that the bank has $300 1000000 in deposits and $255 million dollars in loans. Given this information you find that the reserve requirement must be

l/255.
40/255.
50/300.
twoscore/300.

Question 20. 20. If the reserve ratio is 12.5 per centum, so $v,600 of money tin be generated past

       $64 of new reserves.
$448 of new reserves.
$700 of new reserves.
$800 of new reserves.

Sep 23 2022 12:20 PM

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