Solution: reserve ratio and lending limits
Explanation: Banks when lending money need to consider the minimum reserve ratio and limits on lending
Question 31 (1 point) U.S. banks have proven to be both and when lending money. I
QUESTION 34 Primary credit - is discount lending offered to banks at the discount rate represents loanable funds offered to banks experiencing financial difficulties is lending to banks operating in agricultural and vacation areas QUESTION 35 The Fed can decrease the money supply by ___ selling loans buying stocks purchasing bonds All of the above
7. Before lending someone money, banks must decide whether they believe the applicant will repay the loan. One strategy used is a point system. Loan officers assess information about the applicant, totaling points they award for the person's income level, credit history, current debt burden, and so on. The higher the point total, the more convinced the bank is that it's safe to make the loan. Any applicant with a lower point total than a certain cutoff score is denied...
7,Before lending someone money, banks must decide whether they believe the applicant will repay the loan. One strategy used is a point system. Loan officers assess information about the applicant, totaling points they award for the person's income level, credit history, current debt burden, and so on. The higher the point total, the more convinced the bank is that it's safe to make the loan. Any applicant with a lower point total than a certain cutoff score is denied a...
Question 49 (1 point) Saved When the reserve requirement is increased banks are able to loan out less money. True False
Other things equal, when U.S. money moves to take advantage of better foreign investment opportunities, then: a. U.S. banks will have excess reserves to loan out b. the U.S. money supply will decrease c. the U.S. money supply will increase d. the reserve requirement for U.S. banks will rise e. the effect of the U.S. deposit expansion multiplier will be increased
1) Funds for loans to borrowers can be created in the U.S. economy by: I. Depository intermediaries lending more money than they receive on deposit II. Depository intermediaries increasing the velocity of circulation of the existing money supply III. Non-depository intermediaries increasing the velocity of circulation of the existing money supply Select one: A. I and II only B. I and III only C. II and III only D. I, II, and III 2) Which of the following can increase...
Money is created by the banking system at the point in time when banks accept deposits from its customers.
Question 33 2 Lending temporary excess reserves held at the Federal Reserve Banks is a way that banks can partly reconcile the conflicting goals of: Stocks and flows Inputs and outputs Profit and liquidity Expansion and contraction Question 34 2 pt The multiple by which the commercial banking system can expand the supply of money is equal to: Its excess reserves The reciprocal of the discount rate The reciprocal of the reserve ratio The ratio of fixed to liquid assets...
16. Money market instruments issued by the U.S. Treasury are called (a) Treasury bills. (b) Treasury notes. (c) Treasury bonds. (d) Treasury strips. 17. The most influential participant(s) in the U.S. money market (a) is the Federal Reserve. (b) is the U.S. Treasury Department, (c) are the large money center banks. (d) are the investment banks that underwrite securities 18. Federal funds are (a) usually overnight investments. (b) borrowed by banks that have a deficit of reserves. (c) lent by...
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...