When the Federal Reserve increases the reserve ratio, the impact will be to a. increase the...
-
When the Federal Reserve increases the reserve ratio, the impact will be to
a. increase the size of the spending multiplier.
b. increase the size of the money multiplier.
c. decrease the size of the money multiplier.
d. decrease the size of the spending multiplier.
Homework Answers
Reserve ratio is portion for amount that commercial bank has to minimum maintained and not to lend it or invest somewhere.
If other factors are held constant ,then it can be clearly seen by below formula that money multiplier and required reserve ratio are inverse to each other which means if reserve ratio increases by the Federal Reserve then money multiplier will decrease and vice versa.
So the answer is option D.
Add Answer to:
When the Federal Reserve increases the reserve ratio, the impact
will be to
a.
increase the...
If the Federal reserve increases the supply of money: A. there will be an increase in...
If the Federal reserve increases the supply of money: A. there will be an increase in government spending. B. there will be a decrease in aggregate demand. C. there will be no effect on aggregate demand. D. there will be a decrease in interest rates. E. there will be an increase in interest rates.
Which statement best describes the outcomes of a decrease in reserve requirements? The reserve ratio increases,...
Which statement best describes the outcomes of a decrease in reserve requirements? The reserve ratio increases, the money multiplier decreases, and the money supply decreases. The reserve ratio decreases, the money multiplier decreases, and the money supply decreases. The reserve ratio decreases, the money multiplier increases, and the money supply increases. The reserve ratio increases, the money multiplier increases, and the money supply increases. Question 16 (1 point) Suppose the reserve ratio is 10 percent and banks do not hold...
ed b. The money supply increases, decreases, remains constant): when the required reserve ratio increases. when...
ed b. The money supply increases, decreases, remains constant): when the required reserve ratio increases. when the discount rate decreases. when the Fed sells securities. when the currency drain ratio increases. when the excess reserve ratio decreases. c. d. e. The table below shows the balance sheet in millions of dollars) for three banks. a. Suppose the required reserve ratio is 5 percent. Fill in the table. Bank of East Los Angeles Assets Liabilities Deposit: RR: $120 ER: Bank of...
9 In the U.S econormy the money supply is cot A) U.S Treasury. B) Federal Reserve...
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...
If the Federal Reserve increases the reserve requirement, what will happen to the Money Supply in...
If the Federal Reserve increases the reserve requirement, what will happen to the Money Supply in the banking system? a. Increase b. Decrease c. Remain the same
-0- If the Federal Reserve Bank sells $45 million worth of securities to a commercial bank,...
-0- If the Federal Reserve Bank sells $45 million worth of securities to a commercial bank, then the __in the economy will by $45 million. reserves, increases reserves, decrease currency in circulation; descrease currency in circulation; increase Question 4 1 pts Using the simply money multiplier model, what quantity of securities must the Federal Reserve purchase to generate an increase in the size of checkable deposits by $22,500, assuming the required reserve ratio is 4%? 810 aso
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...
5. How is the money multiplier influenced by the banks' reserve ratio? An increase in banks'...
5. How is the money multiplier influenced by the banks' reserve ratio? An increase in banks' reserves with no change in deposi ks' reserve ratio and the money multiplier. O A. decreases, increases OB. does not change; does not change O c. increases; increases OD. increases; decreases
QUESTION 15 Other things the same, if reserve requirements are increased the reserve ratio a increases,...
QUESTION 15 Other things the same, if reserve requirements are increased the reserve ratio a increases, the money multiplier increases, and the money supply increases. Ob decreases, the money multiplier increases, and the money supply increases. Oc decreases, the money multiplier decreases, and the money supply increases. Od increases, the money multiplier decreases, and the money supply decreases.
30) Assuming initially that the required reserve ratio = 15%, the currency-deposit ratio = 40%, and...
30) Assuming initially that the required reserve ratio = 15%, the currency-deposit ratio = 40%, and the excess reserve ratio = 5%, a decrease in the excess reserve ratio to 0% causes the MI money multiplier to everything else held constant. A) increase from 1.67 to 1.82 10 .11 B ) decrease from 1.82 to 1.67 C) decrease from 2.55 to 2.33 to D) increase from 2.33 to 2.55 35) Which of the following is not a component of the...
Which statement best describes the outcomes of a decrease in reserve requirements? The reserve ratio increases, the money multiplier decreases, and the money supply decreases. The reserve ratio decreases, the money multiplier decreases, and the money supply decreases. The reserve ratio decreases, the money multiplier increases, and the money supply increases. The reserve ratio increases, the money multiplier increases, and the money supply increases. Question 16 (1 point) Suppose the reserve ratio is 10 percent and banks do not hold...
ed b. The money supply increases, decreases, remains constant): when the required reserve ratio increases. when the discount rate decreases. when the Fed sells securities. when the currency drain ratio increases. when the excess reserve ratio decreases. c. d. e. The table below shows the balance sheet in millions of dollars) for three banks. a. Suppose the required reserve ratio is 5 percent. Fill in the table. Bank of East Los Angeles Assets Liabilities Deposit: RR: $120 ER: Bank of...
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...
-0- If the Federal Reserve Bank sells $45 million worth of securities to a commercial bank, then the __in the economy will by $45 million. reserves, increases reserves, decrease currency in circulation; descrease currency in circulation; increase Question 4 1 pts Using the simply money multiplier model, what quantity of securities must the Federal Reserve purchase to generate an increase in the size of checkable deposits by $22,500, assuming the required reserve ratio is 4%? 810 aso
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...
5. How is the money multiplier influenced by the banks' reserve ratio? An increase in banks' reserves with no change in deposi ks' reserve ratio and the money multiplier. O A. decreases, increases OB. does not change; does not change O c. increases; increases OD. increases; decreases
QUESTION 15 Other things the same, if reserve requirements are increased the reserve ratio a increases, the money multiplier increases, and the money supply increases. Ob decreases, the money multiplier increases, and the money supply increases. Oc decreases, the money multiplier decreases, and the money supply increases. Od increases, the money multiplier decreases, and the money supply decreases.
30) Assuming initially that the required reserve ratio = 15%, the currency-deposit ratio = 40%, and the excess reserve ratio = 5%, a decrease in the excess reserve ratio to 0% causes the MI money multiplier to everything else held constant. A) increase from 1.67 to 1.82 10 .11 B ) decrease from 1.82 to 1.67 C) decrease from 2.55 to 2.33 to D) increase from 2.33 to 2.55 35) Which of the following is not a component of the...
Most questions answered within 3 hours.
-
When I have a regression equation such as Y = beta 0 + beta 1 X...
asked 17 seconds ago -
1) Describe how the firm, Google is organized. a. Note the
formal structure (Organizational Charts); also...
asked 6 minutes ago -
Q 1 Give a numerical example of non routine decision,
Determine the relevant costs for this...
asked 7 minutes ago -
A car moving at 87 km/h has tires of 76 cm diameter. If the
vehicle comes...
asked 23 minutes ago -
Most of the galaxies in the universe are observed to be moving
away from Earth. Suppose...
asked 25 minutes ago -
Paired research designs, also sometimes referred to as repeated
measures designs, are associated with some common...
asked 24 minutes ago -
You working as a clinical engineer dealing with
autoclaves, xrays and life care machines, in what...
asked 27 minutes ago -
Explain in detail (not just enumerate) each of Koch’s
postulates to determine the etiology of a...
asked 39 minutes ago -
Assume ABC Company has asked you to not only prepare their 2017
year-end Balance Sheet but...
asked 37 minutes ago -
You have just had a new set of tires put on your car, and now
the...
asked 42 minutes ago -
Please answer ASAP 2) Choose a point at random from the unit
square [0, 1] ×...
asked 57 minutes ago -
Draw the Lewis structures and determine which of these
molecules has a central atom that unavoidably...
asked 57 minutes ago