Question 1

Suppose University Bank has zero excess reserves.If the required reserve ratio decreases,the

Accepted Answer

A) Bank's assets will increase. 
B) Bank will not have enough required reserves. 
C) Bank will be able to make more loans. 
D) Money multiplier will decrease. 
A) Bank's assets will increase. 
B) Bank will not have enough required reserves. 
C) Bank will be able to make more loans. 
D) Money multiplier will decrease.

Question 2

For a small bank in a large banking system,excess reserves are equal to the

Accepted Answer

A) Amount of money that the U.S.Treasury makes available for loans. 
B) The amount of reserves that a bank must hold equal to the loans that it makes. 
C) The amount of loans a bank can make after meeting the reserve requirement. 
D) The difference between transactions account balances and loans. 
A) Amount of money that the U.S.Treasury makes available for loans. 
B) The amount of reserves that a bank must hold equal to the loans that it makes. 
C) The amount of loans a bank can make after meeting the reserve requirement. 
D) The difference between transactions account balances and loans.

Question 3

For something to be considered money it must be:

Accepted Answer

A) Can be used to barter. 
B) A government declares to have value. 
C) Has value. 
D) Generally accepted as a medium of exchange. 
A) Can be used to barter. 
B) A government declares to have value. 
C) Has value. 
D) Generally accepted as a medium of exchange.

Question 4

Which of the following sets the legal minimum reserve ratio?

Accepted Answer

A) The commercial banks. 
B) The U.S.Treasury. 
C) The Federal Reserve. 
D) Congress. 
A) The commercial banks. 
B) The U.S.Treasury. 
C) The Federal Reserve. 
D) Congress.

Question 5

Suppose a bank has $600,000 in deposits,a required reserve ratio of 5 percent,and bank reserves of $90,000.Then the bank can make new loans in the amount of

Accepted Answer

A) $5,400. 
B) $30,000. 
C) $60,000. 
D) $90,000. 
A) $5,400. 
B) $30,000. 
C) $60,000. 
D) $90,000.

Question 6

If the required reserve ratio is 10 percent,a $100 deposit will ultimately allow the banking system to create how much money?

Accepted Answer

A) $100. 
B) $1,000. 
C) $90. 
D) $190. 
A) $100. 
B) $1,000. 
C) $90. 
D) $190.

Exam 13: Money and Banks

Suppose University Bank has zero excess reserves.If the required reserve ratio decreases,the

For a small bank in a large banking system,excess reserves are equal to the

For something to be considered money it must be:

Which of the following sets the legal minimum reserve ratio?

Suppose a bank has $600,000 in deposits,a required reserve ratio of 5 percent,and bank reserves of $90,000.Then the bank can make new loans in the amount of

If the required reserve ratio is 10 percent,a $100 deposit will ultimately allow the banking system to create how much money?

Economics: the Core Issues

The Useconomy: a Global View

Supply and Demand

The Role of Government

National Income Accounting

Unemployment

Inflation

The Business Cycle

Aggregate Demand

Self-Adjustment or Instability

Fiscal Policy

Deficits and Debt

The Federal Reserve System

Monetary Policy

Supply-Side Policy: Short-Run Options

Growth and Productivity: Long-Run Possibilities

Theory Versus Reality

Consumer Choice

Elasticity

The Costs of Production

The Competitive Firm

Competitive Markets

Monopoly

Oligopoly

Monopolistic Competition

Natural Monopolies: Deregulation

Environmental Protection

The Farm Problem

The Labor Market

Labor Unions

Financial Markets

Taxes: Equity Versus Efficiency

Transfer Payments: Welfare and Social Security

International Trade

International Finance

Global Poverty

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