Homework Answers
Deposits that banks have received but have not loaned out are called reserves.
Every commercial bank has to keep a certain percentage of their deposit (on the basis of reserve ratio) in the form of reserves that they can't loan out. Central bank decides the reserve ratio.
Answer: Reserves.
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Question 4 5 pts Deposits that banks have received but have not loaned out are called...
The Federal Reserve specifies a percentage of checkable deposits that banks hold must hold as reserves...
The Federal Reserve specifies a percentage of checkable deposits that banks hold must hold as reserves (required reserves), which is called the required reserve ratio. Excess reserves are reserves that banks hold over and above the required reserves and can make loans. Suppose that Bank A has an increase in checkable deposits of $100 million and the required reserve is 10%. How much money can Bank A create by making loans? How much money can the banking system as a...
*I know that this question may have already been posted but I believe that it may...
*I know that this question may have
already been posted but I believe that it may not have been
thoroughly/accurately answered. Thanks!
The initial money market supply and demand in an economy is given by: Money supply: Ms = $100,000 Money demand: MD 600,000 – 4,000,000r = The following table shows the changes in deposits, reserves and loans of five banks following a $40,000 initial deposit in Best Bank, after the Fed made an open market operation purchase of securities...
Question 1 (1 point) The four elements of a financial system are (1) institutions including banks...
Question 1 (1 point) The four elements of a financial system are (1) institutions including banks and non-financial entities like households, 2) financial products, (3) venues where financial products can be exchanged and (4) ___________. Question 2 (1 point) For the past 65 years, the U.S. financial system has been characterized by, Question 2 options: a) Households that are surplus units, a government that is a surplus unit, businesses that are deficit units and a foreign sector is a surplus...
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...
Assume that the following conditions exist: a. All banks are fully loaned up- there are no...
Assume that the following conditions exist: a. All banks are fully loaned up- there are no excess reserves, and desired excess reserves are always zero. b. The money multiplier is 4 . c. The planned investment schedule is such that at a 4 percent rate of interest, Investment =$1520 billion. At 5 percent, investment is $1510 billion. d. The investment multiplier is 5 . e. The initial equilibrium level of real GDP is $14 trillion. f. The equilibrium rate of...
Ml equals currency + demand deposits + A)nothing else B)othere checkable deposits. C)traveler's checks + other checkable deposits. D)traveler's checks + other checkable deposits -+ savings de...
Ml equals currency + demand deposits + A)nothing else B)othere checkable deposits. C)traveler's checks + other checkable deposits. D)traveler's checks + other checkable deposits -+ savings deposits 2. If you deposit $100 of currency into a demand deposit at a bank, this action by itself A)does not change the money supply. B)increases the money supply. C)decreases the money supply. D)has an indeterminate effect on the money supply. 3. The manager of the bank where you work tells you that your...
Not yet answered Points out of 1.00 P Flag question What does a bank do when...
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 distribute them as interest o b. They lend those excess reserve O c. They distribute them to shareholders od. They hold them in vault cash What is fractional reserve banking? Select one: O a. A system in which banks keep only a percentage of their deposits on reserve as cash O b. A system in...
Assume that the following conditions? exist: a. All banks are fully loaned? up- there are no...
Assume that the following conditions? exist: a. All banks are fully loaned? up- there are no excess? reserves, and desired excess reserves are always zero. b. The money multiplier is 7. ??? c. The planned investment schedule is such that at a 4 percent rate of? interest, Investment ?=$1520 billion. At 5? percent, investment is ?$1500 billion. d. The investment multiplier is 4. e.. The initial equilibrium level of real GDP is ?$14 trillion. f. The equilibrium rate of interest...
QUESTION 12 10 points Save Answer Which of the following statements is/are false regarding Investment Banks:...
QUESTION 12 10 points Save Answer Which of the following statements is/are false regarding Investment Banks: I.) Act as intermediaries between issuers of securities and investors. II.) Act as advisors to companies in helping them analyze their financial needs and find buyers for newly issued securities. III.) Similar to commercial banks, accept deposits from savers and retirees to fund their business. I and II Only ll Only I and III Only III Only QUESTION 13 10 points Save Answer True...
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....
*I know that this question may have
already been posted but I believe that it may not have been
thoroughly/accurately answered. Thanks!
The initial money market supply and demand in an economy is given by: Money supply: Ms = $100,000 Money demand: MD 600,000 – 4,000,000r = The following table shows the changes in deposits, reserves and loans of five banks following a $40,000 initial deposit in Best Bank, after the Fed made an open market operation purchase of securities...
Ml equals currency + demand deposits + A)nothing else B)othere checkable deposits. C)traveler's checks + other checkable deposits. D)traveler's checks + other checkable deposits -+ savings deposits 2. If you deposit $100 of currency into a demand deposit at a bank, this action by itself A)does not change the money supply. B)increases the money supply. C)decreases the money supply. D)has an indeterminate effect on the money supply. 3. The manager of the bank where you work tells you that your...
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 distribute them as interest o b. They lend those excess reserve O c. They distribute them to shareholders od. They hold them in vault cash What is fractional reserve banking? Select one: O a. A system in which banks keep only a percentage of their deposits on reserve as cash O b. A system in...
QUESTION 12 10 points Save Answer Which of the following statements is/are false regarding Investment Banks: I.) Act as intermediaries between issuers of securities and investors. II.) Act as advisors to companies in helping them analyze their financial needs and find buyers for newly issued securities. III.) Similar to commercial banks, accept deposits from savers and retirees to fund their business. I and II Only ll Only I and III Only III Only QUESTION 13 10 points Save Answer True...
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