Homework Answers
6 - Option A
Excess reserves
The difference between required and actual reserves is excess reserves. This excess reserves are used to further lend the loans
7 - Option B
An excess supply of $ 150
Demand = 250
Supply = 400
Hence there is excess supply of $ 150
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9 In the U.S econormy the money supply is cot A) U.S Treasury. B) Federal Reserve System D) Senate Committee on Banking and Finance. 10. Ceteris paribus, if the Fed raised the required reserve ratio A) Banks could increase their lending B) The Federal funds interest rate would rise. The size of the monetary multiplier would decrease. D) The size of the monetary multiplier would increase. 11. Money is created when A) Loans are made. Checks written on one bank...
need all 5 answeres
If the monetary base is $1,000 billion, checkable deposits are $2,000 billion, the required reserve ratio is 10%, and excess reserves are $500 billion, then the currency in circulation are $500 billion, then 92,000 billion. A) $200 billion B) $300 billion. C) $450 billion. D) $700 billion. When the Federal Reserve wants to raise interest rates after banks have accumulated large amounts of excess reserves (i.e., when the supply curve intersects the demand curve at the...
QUESTION 6 Figure 10-20. 450- Social Cost 400 Supply Private Costs) 250- 200- 150 100 Demand 50 100 150 200 250 300 350 400 460 500 Quantty k Save All Answers to save all answers Demand 100 50 50 100 150 200 250 300 350 400 450 500 Quantity Refer to Figure 10-20. Without government intervention O a there is no clear relationship between the equilibrium quantity and socially optimal quantity O b the equilibrium quantity equals the socially optimal...
I got most of the questions answered but not sure how to do D
& E.
Value Total reserves Transactions deposits: Cash held by public Required reserve ratio: $60 billion $400 billion $350 billion 0.10 a. How large is the money supply (M1)? s 750 billion b. Are the banks fully utilizing their lending capacity? Banks currently have 200 billion in excess reserves. Now assume that the public deposited another $20 billion in cash in transactions accounts. c. What would...
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