Homework Answers
Since Reserve Requirement is a minimum amount of Reserve that must be held by the banks
So when reserve requirement increases then the bank will increase the required reserve ratio to increase more reserves.
Now since money multiplier=1/reserve ratio.
So as reserve ratio increases then money multiplier will decrease and reduces the money supply.
So answer us option D
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QUESTION 15 Other things the same, if reserve requirements are increased the reserve ratio a increases,...
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...
5. How is the money multiplier influenced by the banks' reserve ratio? An increase in banks'...
5. How is the money multiplier influenced by the banks' reserve ratio? An increase in banks' reserves with no change in deposi ks' reserve ratio and the money multiplier. O A. decreases, increases OB. does not change; does not change O c. increases; increases OD. increases; decreases
Question A Suppose that the the reserve ratio is 25%. 1. Define the reserve ratio. 2....
Question A Suppose that the the reserve ratio is 25%. 1. Define the reserve ratio. 2. Define the money multiplier. 3. If people deposit all of their cash in the bank, what is the money multi- plier? 4. If people only deposit 2/3 of their cash in the bank, what is the money multiplier? 5. Explain how buying and selling assets by the central bank increases or decreases the money supply. 6. If people deposit all of their cash in...
How does the reserve ratio change if the Fed increases the required reserve ratio? How does...
How does the reserve ratio change if the Fed increases the required reserve ratio? How does the currency-deposit ratio change if people decide to keep more of their money in cash rather than depositing it? If people decide to hold zero currency (, meaning the currency- deposit ratio goes to zero), what is the relationship between the money supply and the monetary base (what is the money multiplier)? If people decide to hold all of their money as currency and...
ed b. The money supply increases, decreases, remains constant): when the required reserve ratio increases. when...
ed b. The money supply increases, decreases, remains constant): when the required reserve ratio increases. when the discount rate decreases. when the Fed sells securities. when the currency drain ratio increases. when the excess reserve ratio decreases. c. d. e. The table below shows the balance sheet in millions of dollars) for three banks. a. Suppose the required reserve ratio is 5 percent. Fill in the table. Bank of East Los Angeles Assets Liabilities Deposit: RR: $120 ER: Bank of...
When the Federal Reserve increases the reserve ratio, the impact will be to a. increase the...
When the Federal Reserve increases the reserve ratio, the impact will be to a. increase the size of the spending multiplier. b. increase the size of the money multiplier. c. decrease the size of the money multiplier. d. decrease the size of the spending multiplier.
Assume that the reserve requirements ratio is 15%. An initial injection of $150 million could result...
Assume that the reserve requirements ratio is 15%. An initial injection of $150 million could result in a maximum change in the money supply of ___.
Question 2 i) Assume that all of the banks in Tilaknesia hold a reserve ratio of 8%. Calculate...
Question 2 i) Assume that all of the banks in Tilaknesia hold a reserve ratio of 8%. Calculate the simple money multiplier. Suppose that on a given day customers deposit $1,250 into their banks. Based on the simple money multiplier calculated in part i), calculate the total amount that the money supply in the banking system will eventually increase to. Now calculate the total amount that the money supply in the banking system will eventually increase to if the reserve ratio...
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...
4. Required reserve ratio If the Fed decreases the required reserve ratio, banks have to hold...
4. Required reserve ratio If the Fed decreases the required reserve ratio, banks have to hold (more or fewer) reserves and thus the size of the money multiplier (decreases or increases) . Which of the following explain why the required reserve ratio is becoming a less useful tool in the conduct of monetary policy? Check all that apply. 1.Popularity of ATMs forces banks to hold on more cash. 2.Demand for money has fallen over time. 3.Popularity of ATMs reduces the...
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...
5. How is the money multiplier influenced by the banks' reserve ratio? An increase in banks' reserves with no change in deposi ks' reserve ratio and the money multiplier. O A. decreases, increases OB. does not change; does not change O c. increases; increases OD. increases; decreases
Question A Suppose that the the reserve ratio is 25%. 1. Define the reserve ratio. 2. Define the money multiplier. 3. If people deposit all of their cash in the bank, what is the money multi- plier? 4. If people only deposit 2/3 of their cash in the bank, what is the money multiplier? 5. Explain how buying and selling assets by the central bank increases or decreases the money supply. 6. If people deposit all of their cash in...
How does the reserve ratio change if the Fed increases the required reserve ratio? How does the currency-deposit ratio change if people decide to keep more of their money in cash rather than depositing it? If people decide to hold zero currency (, meaning the currency- deposit ratio goes to zero), what is the relationship between the money supply and the monetary base (what is the money multiplier)? If people decide to hold all of their money as currency and...
ed b. The money supply increases, decreases, remains constant): when the required reserve ratio increases. when the discount rate decreases. when the Fed sells securities. when the currency drain ratio increases. when the excess reserve ratio decreases. c. d. e. The table below shows the balance sheet in millions of dollars) for three banks. a. Suppose the required reserve ratio is 5 percent. Fill in the table. Bank of East Los Angeles Assets Liabilities Deposit: RR: $120 ER: Bank of...
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...
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