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)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.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 $4,136
- Question 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.0 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 $16.230.66If 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 changes
- 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.Stealth bank has deposits of $370 million. It holds reserves of $35 million and government bonds worth $75 million. If the bank sells its loans at market value of $370 million, what will its total assets equal? O $500 million O $480 million O $110 million $370 million