Question

1. In the federal funds market, _____.? a. ?banks make loans to the Fed b. ?the...

1. In the federal funds market, _____.?

a. ?banks make loans to the Fed
b. ?the Fed makes short-term loans to private borrowers
c. ?the Fed makes long-term loans to commercial banks
d. ?banks make short-term loans to other banks
e.

?banks make long-term loans to other banks

2.

The table below shows the balance sheet of Countybank. If the required reserve ratio is 10 percent, this bank alone can now increase its lending by _____.?

?

Table 14.2

?

COUNTYBANK

Assets

?

Liabilities and Net Worth

?

?

?

?

?

Cash

$1,000

Checkable deposits

$1,000

?a.
$1,000
b. ?$900
c. ?$10,000
d. ?$0
e. ?$90
0 0
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