You receive a $1,000 check from your parents for your birthday, and you deposit this in...
You receive a $1,000 check from your parents for your birthday, and you deposit this in a bank that faces a 10% reserve ratio. What is the consequence if the bank then deposits your check at the Federal Reserve?
| a. |
Excess reserves increase by $900 and required reserves increase by $100. |
|
| b. |
Reserves are not affected. |
|
| c. |
Excess reserves increase by $1,000. |
|
| d. |
Required reserves increase by $1,000. |
|
| e. |
Excess reserves increase by $1,000 and required reserves increase by $100. |
Homework Answers
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You receive a $1,000 check from your parents for your birthday,
and you deposit this in...
1) Suppose that you deposit $2,000 in your bank and the required reserve ratio is 10...
1) Suppose that you deposit $2,000 in your bank and the required reserve ratio is 10 percent. The maximum loan your bank can made as a direct result of your deposit is Answer: $1,800 2) If the reserve requirement ratio (RR) is 0.20, the simple deposit multiplier is Answer: 5 3) Suppose a bank has $100 million in checking account deposits with no excess reserves and the required reserve ratio is 20 percent. If the Federal Reserve reduces the required...
Suppose you found $1,000 hidden in your mattress and deposited it in a demand deposit account at your bank
Suppose you found $1,000 hidden in your mattress and deposited it in a demand deposit account at your bank. If the reserve requirement was 20 percent, the deposit would directly create in excess reserves and ultimately lead to a total increase in the money supply, if all banks in the system lend out 100 percent of their excess reserves.A. $800 ; $4,000B. $800 ; $5,000C. $1,000 ; $4,000D. $1,000 ; $5,000
Suppose the Federal Reserve purchases $10,000 of Treasury bonds from you and that you deposit the...
Suppose the Federal Reserve purchases $10,000 of Treasury bonds from you and that you deposit the $10,000 into your checking account deposit at Bank Y. Assume that Bank Y has no excess reserves at the time you make your deposit and that the required reserve ratio is 20 percent. a. Use a T-account to show the initial effect of this transaction on Bank Y's balance sheet. b. Suppose that Bank Y makes the maximum loan they can from the funds...
help! If you withdraw $5,000 from your checking account and the required reserve ratio is 19...
help!
If you withdraw $5,000 from your checking account and the required reserve ratio is 19 percent, then the bank's Instructions: Enter your responses as a whole number a. Total deposits fall by $ 5000 1 b. Required reserves fall c Excess reserves fall by $_ by $ If you deposit a $500 check in your checking account and the required reserve ratio is 19 percent, then the bank's Instructions: Enter your responses as a whole number d. Total deposits...
ommercial Bank has $5,000 in excess reserves, $90,000 in checkable deposit and the reserve ratio is...
ommercial Bank has $5,000 in excess reserves, $90,000 in checkable deposit and the reserve ratio is 30 percent. The bank must have: A. $35,000 in reserves. B. $32,000 in reserves. C. $10,000 in reserves. D. 15,000 in reserves 23. Suppose a commercial bank has checkable deposits of $100,000 and the legal reserve ratio is A. are $17,000. 10 percent. If this bank has $ 17,000 in reserves, then its excess reserves: B. are $10,000. C. are $7,000. D. are $1,700...
Compute the impact on the money multiplier of an increase in the currency-to-deposit ratio from 10...
Compute the impact on the money multiplier of an increase in the currency-to-deposit ratio from 10 percent to 14 percent when the reserve requirement Is 8 percent of deposits, and banks' desired excess reserves are 3 percent of deposits Instructions: Enter your responses rounded to two decimal places. When desired currency holdings 10 % of deposits, m When desired currency holdings 14 % of deposits, m Suppose the currency-to-deposit ratio is 0.2, the excess reserve-to-deposit ratio is 0.05, and the...
Suppose the Imperial Galactic Bank has received $1,000 of deposits and all banks face a required...
Suppose the Imperial Galactic Bank has received $1,000 of deposits and all banks face a required reserve ratio of 10 percent. What is the maximum amount of money supply that can be created with this deposit if the Imperial Galactic Bank holds on to $100 of excess reserves (assume it is the only bank in the money supply process that holds on to excess reserves) and no one holds on to cash? a. $9.900 b. $9,000 C. cannot be calculated...
1. Suppose you withdraw $500 from your checking account at your bank, which has a required...
1. Suppose you withdraw $500 from your checking account at your bank, which has a required reserve ratio of 30%. Initially, as a result of your this transaction, the size of M1 will.... (Increase/decrease/remain unchanged) . Before any further actions by your bank, the reserves in your bank..... Increase/decrease/remain unchanged) by... while the excess reserves of your bank ..... (Increase/decrease/remain unchanged) by .... 2. Suppose that the general public decided to decrease its holdings of currency and increase its checking...
6. If reserves in the banking system increase by $100, then checkable deposits will increase by...
6. If reserves in the banking system increase by $100, then checkable deposits will increase by $400 in the simple model of deposit creation when the required reserve ratio is eserve retioKeserves De posi+s 7. If the required reserve ratio is one-third, curreney in circulation is $300 billion, checkable deposits are $900 billion, and there is no excess reserve, then the MI money multiplier is 8. If the required reserve ratio is 10 percent, currency in circulation is $400 billion,...
If you deposit a $50 check in the bank, the immediate impact on your bank's balance...
If you deposit a $50 check in the bank, the immediate impact on your bank's balance sheet will be a $50 decrease in reserves and a $50 increase in checkable deposits. $50 increase in reserves and a $50 increase in checkable deposits. $50 increase in reserves and a $50 decrease in checkable deposits. $50 decrease in liabilities and a $50 increase in checkable deposits.
Suppose the Federal Reserve purchases $10,000 of Treasury bonds from you and that you deposit the $10,000 into your checking account deposit at Bank Y. Assume that Bank Y has no excess reserves at the time you make your deposit and that the required reserve ratio is 20 percent. a. Use a T-account to show the initial effect of this transaction on Bank Y's balance sheet. b. Suppose that Bank Y makes the maximum loan they can from the funds...
help!
If you withdraw $5,000 from your checking account and the required reserve ratio is 19 percent, then the bank's Instructions: Enter your responses as a whole number a. Total deposits fall by $ 5000 1 b. Required reserves fall c Excess reserves fall by $_ by $ If you deposit a $500 check in your checking account and the required reserve ratio is 19 percent, then the bank's Instructions: Enter your responses as a whole number d. Total deposits...
ommercial Bank has $5,000 in excess reserves, $90,000 in checkable deposit and the reserve ratio is 30 percent. The bank must have: A. $35,000 in reserves. B. $32,000 in reserves. C. $10,000 in reserves. D. 15,000 in reserves 23. Suppose a commercial bank has checkable deposits of $100,000 and the legal reserve ratio is A. are $17,000. 10 percent. If this bank has $ 17,000 in reserves, then its excess reserves: B. are $10,000. C. are $7,000. D. are $1,700...
Compute the impact on the money multiplier of an increase in the currency-to-deposit ratio from 10 percent to 14 percent when the reserve requirement Is 8 percent of deposits, and banks' desired excess reserves are 3 percent of deposits Instructions: Enter your responses rounded to two decimal places. When desired currency holdings 10 % of deposits, m When desired currency holdings 14 % of deposits, m Suppose the currency-to-deposit ratio is 0.2, the excess reserve-to-deposit ratio is 0.05, and the...
Suppose the Imperial Galactic Bank has received $1,000 of deposits and all banks face a required reserve ratio of 10 percent. What is the maximum amount of money supply that can be created with this deposit if the Imperial Galactic Bank holds on to $100 of excess reserves (assume it is the only bank in the money supply process that holds on to excess reserves) and no one holds on to cash? a. $9.900 b. $9,000 C. cannot be calculated...
6. If reserves in the banking system increase by $100, then checkable deposits will increase by $400 in the simple model of deposit creation when the required reserve ratio is eserve retioKeserves De posi+s 7. If the required reserve ratio is one-third, curreney in circulation is $300 billion, checkable deposits are $900 billion, and there is no excess reserve, then the MI money multiplier is 8. If the required reserve ratio is 10 percent, currency in circulation is $400 billion,...
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