If a bank uses $100 of excess reserves to make a newloan when the reserve ratio is 25 percent, what happensto 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 TextSuppose a bank has $200,000 in deposits and $150,000in loans. What is its reserve ratio?O a.1 percentO b.5 percentO C.10 percentO d. 25 percentShow Transcribed TextWhich list ranks the Bank of Canada's monetary policytools from most to least frequently used?O a.bank rate changes; open-market transactions;reserve requirement changesO b. bank rate changes; reserve requirementchanges; open-market transactionsO c. open-market transactions; bank rate changes;reserve requirement changesO d. open-market transactions; reserve requirementchanges; bank rate changes

Money supply refers to the sum of all types of money that are available and circulating in the…

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. 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? Oa. 1 percent 5 percent C. 10 percent O d. 25 percent O b. 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

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. 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? Oa. 1 percent 5 percent C. 10 percent O d. 25 percent O b. 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

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assume 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.
Banks 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.
Suppose a banking system has a required reserve ratio of 10% and a $100,000 is deposited into the first bank in the system. What will be the immediate excess reserves for that first bank in the system and by how much can the total money supply in the system expand? $70,000; 700,000. O $100,000; $1,900,000. $90,000, $900,000. O $10,000; $100,000.
Table 1 First Charter Bank Assets Liabilities Reserves $800 $400 Deposits Net Worth Loans Total $1.200 Total Refer to Table 1. The required reserve ratio is 25%. If the First Charter Bank is meeting its reserve requirement and has no excess reserves, its loans equal Lütfen birini seçin: O A. $600 O B. $900 OC $1,000 O D. $1,800 O E $1400
If the reserve ratio for the bank below is 25%, is the bank current over or under reserved at by how much? Assets Liabilities/Equity Demand Deposits Reserves Loans Shareholders' equity Securities Fixed assets Total $50 250 150 50 500 Select one: O a. Over-reserved by $100 O b. Neither over or under-reserved O c. Over-reserved by $50 O d. Under-reserved by $50 e. Under-reserved by $100 Total $400 100 500
Cash: $104.25 billion Checking deposits: $157.4 billion Saving accounts: $270.5 billion Small denomination time deposits: $20.3 billion Bank reserves held at the Fed: $33.0 billion Suppose that in a certain economy, the above are the only forms of money. How much M2 money is there? O a. $565.15 billion O b. $282.15 billion O c. $427.90 billion O d. $303.50 billion O e. $137.25 billion O f. $552.45 billion
Assume that Bank A holds total reserves of $978, the required reserves are $432 and total deposit is $3,600. If the government purchases bonds worth $260 from Bank A, excess reserves of this bank will increase by O $220 O $246.40 O $227.50 $245 $228.80
Suppose there is an upswing in the economy with a large demand for finance to invest by the residential and non-residential building sector such that lending by all banks increases by $250 billion. On the assumption the reserve (or liquidity) ratio of banks is 12% this expansion in economic activity will result in an endogenous increase of O $20 billion of reserves and $230 billion of bank deposit money O $34.1 billion of reserves and $284.1 billion of bank deposit money O $20 billion of reserves and $270 billion of bank deposit money O $26.2 billion of reserves and $276.2 billion of bank deposit money
Suppose that a bank with no excess reserves receives a deposit into a checking account of $8,000 in currency. If the required reserve ratio is 0.20, what is the maximum amount that the bank can lend out? Select one: OA $1,600 O B. $6,400 OC $8,000 O D. $40,000
Which set of actions could the central bank use to increase the money supply? Select one: O a. an open market purchase and a tax cut O b. a discount rate cut and an open market sale O c.a reduction in the required reserve ratio and an open market purchase O d. a reduction in the required reserve ratio and an open market sale
Suppose that in a certain banking system, the target reserve ratio is 45%. Keeping in mind the money multiplier, if the central bank in this economy wanted to expand the money supply by $400 billion, then by how much would this central bank need to increase the monetary base (MB)? O a. $355.00 billion O b. $72.50 billion O c. $180.00 billion O d. $11.25 billion O e. $27.59 billion f. $360.00 billion g. $7.27 billion
If a bank gets $90 in new reserves from the Fed and the required-reserve ratio is 0.1, then the maximum amount by which total deposits in the economy can increase is O $900 O $90 O $9 O $80