Homework Answers
Q4
Answer
Option 4
required reserves =Actual reserves -excess reseerves
Actual reserves are reseves anytime in the bank
Required reserves are the reserves required to keep as per legal
requirement
Excess reserves is actual reserves above excess reserves.
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Q5
Answer
Option 1
required reserves =actual reserves -excess reserves
=20000-12000
=8000
checkable deposits =required reserves /reserve requirment
=8000/0.08
=$100000
option 1
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4&5 please
QUESTION 4 Which of the following is correct? O Required reserves equal excess reserves...
Question 1 (1 point) The amount of reserves that a commercial bank is required to hold...
Question 1 (1 point)
The amount of reserves that a commercial bank is required to
hold is equal to:
Question 1 options:
the amount of its checkable deposits.
the sum of its checkable deposits and time deposits.
its checkable deposits multiplied by the reserve
requirement.
its checkable deposits divided by its total assets.
Save
Question 2 (1 point)
Answer the question on the basis of the following information
for the Moolah Bank.
Refer to the information and assume that Moolah...
If the reserve requirement is 20% and commercial bankers decide to hold additional excess reserves equal...
If the reserve requirement is 20% and commercial bankers decide to hold additional excess reserves equal to 5% of any newly acquired checkable deposits, then the effective monetary multiplier for the banking system will be Multiple Choice 3. 4. 6. 5. < Prex 2 of 45 lll Next > Next
QUESTION 15 First Charter Bank Liabilities $2,000,000 Deposits $200,000 $1,800,000 $2,000,000 Assets Reserves Loans Total $2,000,000...
QUESTION 15 First Charter Bank Liabilities $2,000,000 Deposits $200,000 $1,800,000 $2,000,000 Assets Reserves Loans Total $2,000,000 Total Table 13.4 Refer to Table 13.4. If First Charter Bank earns a loss of $100,000, then: O owner's equity will decrease by $100,000. O deposits will decrease by $100,000. o owner's Equity will increase by $100,000. O deposits will increase by $100,000. QUESTION 16 $60,000 $40,000 People's Bank Assets Liabilities Total Reserves: $500,000 Deposits Required Owners' Equity Excess Loans Total $700,000 Total $700,000...
2. Required and excess reserves Suppose that Best National Bank currently has $100,000 in checkable deposits...
2. Required and excess reserves Suppose that Best National Bank currently has $100,000 in checkable deposits and $65,000 in outstanding loans. The Federal Reserve has set the reserve requirement at 10%. Using these values, fill in the empty cells for reserves, required reserves, and excess reserves in the following table Best National Reserves Required Reserves Excess Reserves (Dollars) (Dollars) (Dollars)
4. Suppose Bantam Bank has excess reserves of $8,000 and checkable deposits of $150,000. If the...
4. Suppose Bantam Bank has excess reserves of $8,000 and checkable deposits of $150,000. If the required reserve ratio is 20%. a. What is the size of the bank's actual reserves? b. If Bob deposits $10,000 into the bank, how much will the money supply increase? c. What is the money multiplier for this banking system?
The balance sheet below is for the First Federal Bank. Assume the required reserve ratio is...
The balance sheet below is for the First Federal Bank. Assume the required reserve ratio is 20 percent. Liabilities +Net Worth Reserves $100,000 Checkable Deposits $300,000 140,000 Stock Shares Securities 60,000 Property 200,000 Refer to the above information. If the original bank balance sheet was for the commercial banking system, rather than a single bank, loans and deposits could have been expanded by a maximum of: (Hint: Since we are looking at the whole banking system the excess reserves of...
Suppose that Mountain Star Bank discovers that its reserves will temporarily fall slightly below those legally...
Suppose that Mountain Star Bank discovers that its reserves will temporarily fall slightly below those legally required. How might it temporarily remedy this situation through the Federal funds market? Now assume Mountain Star finds that its reserves will be substantially and permanently deficient. What remedy is available to this bank? How would a decrease in the reserve requirement affect the (a) size of the money multiplier, (b) amount of excess reserves in the banking system, and (c) extent to which...
Exhibit 13-1 Exhibit 13-1 Bank Increase in Checkable Deposits New Required Reserves New Checkable Deposits Created...
Exhibit 13-1 Exhibit 13-1 Bank Increase in Checkable Deposits New Required Reserves New Checkable Deposits Created by Extending New Loans A $0 $0 $1,000 B $1,000 (A) (B) C (C) $90 (D) D $810 (E) (F) Assume that the required reserve ratio is 10%, that there are no cash leakages, and that banks hold zero excess reserves. Refer to Exhibit 13-1. Suppose that the Federal Reserve conducts open market operations by purchasing $1,000 worth of government securities from Bank A....
1. Which of the following is incorrect? a. The reserves held in excess of required reserves...
1. Which of the following is incorrect? a. The reserves held in excess of required reserves are excess reserves. b. Total reserves equal required reserves plus excess reserves. c. The reserves held to meet the reserve requirement are required reserves. d. Banks decide how much excess reserves to hold, so excess reserves can be positive or negative. 2. As aggregate demand shifts left along the short-run aggregate supply curve, a. unemployment is higher and inflation is lower. b. unemployment and...
1. The goldsmith's ability to create money was based on the fact that: a) withdrawals of...
1. The goldsmith's ability to create money was based on the fact that: a) withdrawals of gold tended to exceed deposits of gold in any given time period. b) consumers and merchants preferred to use gold for transactions, rather than paper money. c) the goldsmith was required to keep 100 percent gold reserves. d) deposits of gold tended to exceed withdrawals of gold in any given time period. 2. In a fractional reserve banking system: a) deposit insurance increases the...
Question 1 (1 point)
The amount of reserves that a commercial bank is required to
hold is equal to:
Question 1 options:
the amount of its checkable deposits.
the sum of its checkable deposits and time deposits.
its checkable deposits multiplied by the reserve
requirement.
its checkable deposits divided by its total assets.
Save
Question 2 (1 point)
Answer the question on the basis of the following information
for the Moolah Bank.
Refer to the information and assume that Moolah...
If the reserve requirement is 20% and commercial bankers decide to hold additional excess reserves equal to 5% of any newly acquired checkable deposits, then the effective monetary multiplier for the banking system will be Multiple Choice 3. 4. 6. 5. < Prex 2 of 45 lll Next > Next
QUESTION 15 First Charter Bank Liabilities $2,000,000 Deposits $200,000 $1,800,000 $2,000,000 Assets Reserves Loans Total $2,000,000 Total Table 13.4 Refer to Table 13.4. If First Charter Bank earns a loss of $100,000, then: O owner's equity will decrease by $100,000. O deposits will decrease by $100,000. o owner's Equity will increase by $100,000. O deposits will increase by $100,000. QUESTION 16 $60,000 $40,000 People's Bank Assets Liabilities Total Reserves: $500,000 Deposits Required Owners' Equity Excess Loans Total $700,000 Total $700,000...
2. Required and excess reserves Suppose that Best National Bank currently has $100,000 in checkable deposits and $65,000 in outstanding loans. The Federal Reserve has set the reserve requirement at 10%. Using these values, fill in the empty cells for reserves, required reserves, and excess reserves in the following table Best National Reserves Required Reserves Excess Reserves (Dollars) (Dollars) (Dollars)
4. Suppose Bantam Bank has excess reserves of $8,000 and checkable deposits of $150,000. If the required reserve ratio is 20%. a. What is the size of the bank's actual reserves? b. If Bob deposits $10,000 into the bank, how much will the money supply increase? c. What is the money multiplier for this banking system?
The balance sheet below is for the First Federal Bank. Assume the required reserve ratio is 20 percent. Liabilities +Net Worth Reserves $100,000 Checkable Deposits $300,000 140,000 Stock Shares Securities 60,000 Property 200,000 Refer to the above information. If the original bank balance sheet was for the commercial banking system, rather than a single bank, loans and deposits could have been expanded by a maximum of: (Hint: Since we are looking at the whole banking system the excess reserves of...
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