Question

Not yet answered Points out of 1.00 P Flag question What does a bank do when they have excess reserves? Select one: O a. They
What is fractional reserve banking? Select one: O a. A system in which banks keep only a percentage of their deposits on rese
0 0
Add a comment Improve this question Transcribed image text
Answer #1

Ans1. Correct Option is d.They hold them in vault cash

Explanation -

Excess reserves are held by the bank and not loaned out because it acts like a safety buffer in the bad times for the bank.So thats why they hold they excess reserve in the vault cash.

Ans2. Correct Option is a. A system in which banks keeps only a percentage.....

Explanation -

Fractional reserve banking is a system where only small part of the deposits are backed up by real cash and most of the money is lended out to . It is used mainly by the commercial banks to make new money.

------------------------------------------------------------------------------------------------------------

Add a comment
Know the answer?
Add Answer to:
Not yet answered Points out of 1.00 P Flag question What does a bank do when...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • When can a bank make loans? a. when it has the minimum amount of required reserves...

    When can a bank make loans? a. when it has the minimum amount of required reserves b. only when it is confident that it can meet all the cash needs of depositors c. only when it has deposited all cash at the Federal Reserve d. when it has reserves greater than the amount of required reserves e. There is not enough information to solve this problem. 37. In a fractional reserve banking system, banks a. are able to create money...

  • 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....

  • QUESTION 25 Not yet answered Marked out of 1.00 P Flag question Mazaya Company developed the...

    QUESTION 25 Not yet answered Marked out of 1.00 P Flag question Mazaya Company developed the following reconciling information in preparing its April bank reconciliation: Cash balance per bank, 4/30 R.0.15.400, Note receivable collected by bank 8,400; Outstanding checks 12,600; Deposits in transit 6,300, Bank service charge 150; NSF check 1,680; Using the above information, determine the cash balance per books (before adjustments) for the Mazaya Company Select one a R0.8,685 O b. R.0.8,785 O c.R.O.2,530 d.RO 2,485

  • Question 12 Not yet answered Points out of 1.00 P Flag question The DNA remains in...

    Question 12 Not yet answered Points out of 1.00 P Flag question The DNA remains in the nucleus when RNA is made. That process is properly known as Select one: O a. transcription. O b. translation. c. transmutation. d. conversation. Question 13 Not yet answered Points out of 1.00 P Flag question The copy of the DNA in the form of RNA leaves the nucleus and goes to the Select one: a. cell membrane. b. Golgi bodies C. vacuole. Od....

  • 10. Al Fed purchases and sales of A corporate stocks and bonds are conducted at the...

    10. Al Fed purchases and sales of A corporate stocks and bonds are conducted at the New York Fed's trading desk. B. government bonds are conducted at the New York Fed's trading desk. c real estate and other real assets are conducted by the Federal Open Market Committee D. All of the above are correct. E A and C, only 11. Under a fractional reserve banking system, A banks hold required reserves but generally lend out a majority of their...

  • If this balance sheet depicts the only bank in the economy, how large is M1?   ...

    If this balance sheet depicts the only bank in the economy, how large is M1?    a-$5 million b-$10 million   c-$15 million   d-$60 million   e-$65 million Given the balance sheet above and assuming a required reserve ratio of 20%, which of the following accurately describes the bank's situation? a-it is failing to meet its reserve requirement   b-it is just meeting its reserve requirement, but has no excess reserves   c-it is meeting its reserve requirement, and has $5 million in excess...

  • Question 11 Not yet answered Marked out of 1.00 P Flag question The DNA of an...

    Question 11 Not yet answered Marked out of 1.00 P Flag question The DNA of an organism is studied and found to contain 14% guanine. This organism should have __% thymine and __% cytosine in its DNA. Select one: O a. 36; 36 O b. 14; 36 O c. 14; 86 O d. 36; 14 Question 12 Not yet answered Marked out of 1.00 Flag question The strands of a DNA double helix are said to be antiparallel. This means...

  • Question 46 Not yet answered Points out of 1 P Flag question The structural and functional...

    Question 46 Not yet answered Points out of 1 P Flag question The structural and functional unit of skeletal muscle is the Select one: O a. Sarcolemma O b. Actin myofilament O c. Sarcomere O d. Myosin myofilament Question 34 Not yet answered Points out of 1 P Flag question Which one of the following proteins is present in the thin filament? Select one: O a. Myosin O b. Titin O c. Actin Dronione nome Net Which one of the...

  • Question 73 Not yet answered Points out of 1.00 p Flag question Which blood test is...

    Question 73 Not yet answered Points out of 1.00 p Flag question Which blood test is reliable and early indication of cardiac damage, indicative of an acute myocardial infarction? Select one: o a. Creatinine kinase (CK) O b. Complete blood count (CBC) O c.Troponin 1 O d. Lactate dehydrogenase (LD) Question 74 Not yet answered Points out of 1.00 p Flag question The nurse observes that an older client has a hunched back and measures 1-inch shorter than last year....

  • 5. Suppose the FED buys $1 million bonds from a bank. Assume that the public does not want to hol...

    5. Suppose the FED buys $1 million bonds from a bank. Assume that the public does not want to hold any additional currency. a. what is the total increase in deposits in the economy if all banks keep 2% excess reserves (i.e. in addition to the 10% required by law)? (10 points) b. Describe the two first steps of the deposit creation process within the banking system. (10 points) 5. Suppose the FED buys $1 million bonds from a bank....

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT