A bank with a higher reserve ratio is considered __________ one with a lower reserve ratio....
A bank with a higher reserve ratio is considered __________ one with a lower reserve ratio.
Group of answer choices
less liquid than
more liquid than
equally as liquid as
Homework Answers
The right answer is less liquid than. A bank with high reserve ratio is considered less liquid than one with lower reserve ratio because a bank with high reserve ratio has to maintain a higher proportion of the deposits with the central bank that means they have less deposits available to make the loans to the potential borrowers.
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A bank with a higher reserve ratio is considered __________ one
with a lower reserve ratio....
If Bank of Mateer has a required reserve ratio of 40 percent and there is $100,000...
If Bank of Mateer has a required reserve ratio of 40 percent and there is $100,000 in deposits, what is the amount of required reserves? Group of answer choices $100,000 $60,000 $15,000 $0 $40,000
A bank's reserve ratio is 8 percent and the bank has $1,000 in deposits. Its reserves...
A bank's reserve ratio is 8 percent and the bank has $1,000 in deposits. Its reserves amount to Group of answer choices $80 $920 $8 $92
If the Federal Reserve Bank purchases $120 million worth of securities in the open market, then...
If the Federal Reserve Bank purchases $120 million worth of securities in the open market, then the monetary base will Group of answer choices The monetary base will decrease by exactly $120 million The monetary base will increase by exactly $120 million The monetary base will increase by more than $120 million The monetary base will decrease by less than $120 million
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 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.
QUESTION 2 The higher the required reserve ratio, _____. a. the more the money that can...
QUESTION 2 The higher the required reserve ratio, _____. a. the more the money that can be lent in each round of the money-creation process b. the more the excess reserves after each round of the money-creation process c. the lower the demand for cash by the non-banking public d. the smaller the money multiplier e. the larger the money multiplier
The Federal Reserve Bank purchases $140,000 in securities and as a result, total amount of loans...
The Federal Reserve Bank purchases $140,000 in securities and as a result, total amount of loans in the economy rises by $1,166,666. Then according to the simple deposit multiplier model, the required reserve ratio is Group of answer choices 10% 12% 16% 19%
Suppose that the Federal Reserve Bank buys $130 million worth of securities from the non-bank public,...
Suppose that the Federal Reserve Bank buys $130 million worth of securities from the non-bank public, who then deposits the compensation in their checking account. As a result, ______ will increase by $130 million and so, the monetary base will rise by ______. Group of answer choices A) currency in circulation; by more than $130 million B) currency in circulation; exactly $130 million C) reserves; by more than $130 million D) reserves; exactly $130 million
10. Suppose the reserve ratio is 25%. Bank One has $12,000 deposits and $3,000 bank capital (owners' equity). Bank One...
10. Suppose the reserve ratio is 25%. Bank One has $12,000 deposits and $3,000 bank capital (owners' equity). Bank One has $3,000 securities. What are the reserves and loans? a. Draw the bank balance sheet with reserves, deposits, loans, securities and capital. b. What is the total amount of reserves? c. What is the total amount of loans? d. What is the leverage ratio? e. If $500 are deposited, how much money would be created with a reserve ratio of...
After a FOMC meeting, the Federal Reserve Bank concludes that they need to increase the monetary...
After a FOMC meeting, the Federal Reserve Bank concludes that they need to increase the monetary base by $120 million. In this case, the Fed can accomplish this goal by Group of answer choices A) purchasing less than $120 million in securities B) purchasing exactly $120 million worth of securities C) selling exactly $120 million worth of securities D) selling less than $120 million worth of securities
10. Suppose the reserve ratio is 25%. Bank One has $12,000 deposits and $3,000 bank capital (owners' equity). Bank One has $3,000 securities. What are the reserves and loans? a. Draw the bank balance sheet with reserves, deposits, loans, securities and capital. b. What is the total amount of reserves? c. What is the total amount of loans? d. What is the leverage ratio? e. If $500 are deposited, how much money would be created with a reserve ratio of...
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