If a bank uses $80 of reserves to make a new loan when the reserve ratio...
If a bank uses $80 of reserves to make a new loan when the reserve ratio is 25 percent,
|
a. |
the money supply initially decreases by $80. |
|
b. |
the money supply initially increases by $20. |
|
c. |
the money supply will eventually increase by more than $20 but less than $80. |
|
d. |
the level of wealth in the economy will not change. |
Homework Answers
Option D
Explanation: The level of wealth does not change with the change in the money supply.
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If a bank uses $80 of reserves to make a new loan when the
reserve ratio...
If a bank uses $80 of reserves to make a new loan when the reserve ratio is 25% A) Money supply initially decreases by $...
If a bank uses $80 of reserves to make a new loan when the reserve ratio is 25% A) Money supply initially decreases by $80 B) Money supply initially increases by $20 C) Money supply will eventually increase by more than $20 but less than $80 D) Level of wealth in economy will not change
Suppose the reserve ratio is 5 percent, banks do not hold excess reserves, people do not...
Suppose the reserve ratio is 5 percent, banks do not hold excess reserves, people do not hold currency, and the Bank of Canada purchases $20 million of government bonds. Which statement best describes the effects of Bank of Canada's purchase? O a Bank reserves increase by $20 million, and the money supply eventually decreases by $400 million Ob Bank reserves decrease by $20 million, and the money supply eventually increases by $400 million O Bank reserves decrease by $20 million,...
Which statement best describes the outcomes of a decrease in reserve requirements? The reserve ratio increases,...
Which statement best describes the outcomes of a decrease in reserve requirements? The reserve ratio increases, the money multiplier decreases, and the money supply decreases. The reserve ratio decreases, the money multiplier decreases, and the money supply decreases. The reserve ratio decreases, the money multiplier increases, and the money supply increases. The reserve ratio increases, the money multiplier increases, and the money supply increases. Question 16 (1 point) Suppose the reserve ratio is 10 percent and banks do not hold...
d. $200 reserve ratio is 5 percent and the bank has $1,000 in deposits. Its reserves...
d. $200 reserve ratio is 5 percent and the bank has $1,000 in deposits. Its reserves amount to S5. S50. c. $95. d. $950 Suppose banks desire to hold no excess reserves and that the Fed has set a reserve requirement of 10 percent. If you deposit $9,000 into First Jayhawk Bank, a. First Jayhawk's required reserves increase by $900. b. First Jayhawk will be able to lend out $8,100 c. First Jayhawk's assets and liabilities both will increase by...
If the reserve ratio is 100-percent, then a new deposit of $500 into a bank account...
If the reserve ratio is 100-percent, then a new deposit of $500 into a bank account eventually increases the money supply by $500 leaves the size of the money supply unchanged eventually decreases the size of the money supply by $500. None of the above is correct.
Suppose that the reserve ratio is 8.5 percent. An additional $10,000 of excess reserves has the...
Suppose that the reserve ratio is 8.5 percent. An additional $10,000 of excess reserves has the potential to increase the money supply by more than $100,000. Select one: True False f the public decides to hold more currency and, therefore, less money as deposits in banks, then bank reserves decrease and the money supply eventually decreases. Select one: True False Currency held by the public is part of the money supply, but currency held by banks in the bank vault...
If the public decides to hold less currency and more deposits in banks, bank reserves a)...
If the public decides to hold less currency and more deposits in banks, bank reserves a) increase and the money supply eventually increases. b) increase but the money supply does not change. c) decrease but the money supply does not change. d) decrease and the money supply eventually decreases.
1) Bank 1 has deposits of $4141 and reserves of $455. If the required reserve ratio...
1) Bank 1 has deposits of $4141 and reserves of $455. If the required reserve ratio is 10%, what is the value of the bank's excess reserves? Enter a whole number with no dollar sign. Round to the nearest whole number. 2) In a fractional reserve banking system a. banks hold a fraction of deposits as reserves. b. the reserve ratio measures the percentage of deposits available to be lent out. c. banks hold a fraction of reserves as deposits....
If the reserve ratio is 10 percent and a bank receives a new deposit of $10,...
If the reserve ratio is 10 percent and a bank receives a new deposit of $10, this bank a. must increase required reserves by $1. b. will initially see its total reserves increase by $1. c. will be able to make new loans up to a maximum of $1. d. All of the above are true.
suppose the reserveraho is 5 percent, banks do not hold excess reserves, people do not hold...
suppose the reserveraho is 5 percent, banks do not hold excess reserves, people do not hold currency, and the Bank of Canada purchases $20 million of government bonds. Which statement best describes the effects of Bank of Canada's purchase? O. Bank reserves decrease by $20 million, and the money supply eventually decreases by S400 million O Bank reserves increase by $20 million, and the money supply eventually increases by 5400 million O Bank reserves decrease by $20 million, and the...
Suppose the reserve ratio is 5 percent, banks do not hold excess reserves, people do not hold currency, and the Bank of Canada purchases $20 million of government bonds. Which statement best describes the effects of Bank of Canada's purchase? O a Bank reserves increase by $20 million, and the money supply eventually decreases by $400 million Ob Bank reserves decrease by $20 million, and the money supply eventually increases by $400 million O Bank reserves decrease by $20 million,...
Which statement best describes the outcomes of a decrease in reserve requirements? The reserve ratio increases, the money multiplier decreases, and the money supply decreases. The reserve ratio decreases, the money multiplier decreases, and the money supply decreases. The reserve ratio decreases, the money multiplier increases, and the money supply increases. The reserve ratio increases, the money multiplier increases, and the money supply increases. Question 16 (1 point) Suppose the reserve ratio is 10 percent and banks do not hold...
d. $200 reserve ratio is 5 percent and the bank has $1,000 in deposits. Its reserves amount to S5. S50. c. $95. d. $950 Suppose banks desire to hold no excess reserves and that the Fed has set a reserve requirement of 10 percent. If you deposit $9,000 into First Jayhawk Bank, a. First Jayhawk's required reserves increase by $900. b. First Jayhawk will be able to lend out $8,100 c. First Jayhawk's assets and liabilities both will increase by...
suppose the reserveraho is 5 percent, banks do not hold excess reserves, people do not hold currency, and the Bank of Canada purchases $20 million of government bonds. Which statement best describes the effects of Bank of Canada's purchase? O. Bank reserves decrease by $20 million, and the money supply eventually decreases by S400 million O Bank reserves increase by $20 million, and the money supply eventually increases by 5400 million O Bank reserves decrease by $20 million, and the...
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