Exam 15: Money Creation

Exhibit 15-7 Lower Walloon National Bank In Exhibit 15-7, if the required reserve ratio is 20 percent, and Mr. Brown deposits $10,000 in Lower Walloon National Bank. The Lower Walloon National bank has excess reserves of:

Imagine that Odyssey National is a brand new bank, and that its required reserve ratio is 10 percent. If it accepts a $1,000 cash deposit, then, excluding the $1,000 initial deposit, the banking system can increase the money supply by:

If total deposits at Last Bank and Trust are $100 million, total loans are $70 million, and excess reserves are $20 million, then which of the following is the required reserve ratio?

Which of the following directs open market operations?

The rate of interest charged by the Federal Reserve to member banks for reserves borrowed from the Fed is known as the:

Which of the following would cause the money supply in the United States to expand?

Which of the following would cause the money supply in the United States to decrease?

When the Fed lowers the required reserve ratio, it:

If a bank that is subject to a 10 percent required reserve ratio has $20,000 in excess reserves, it can make new loans of:

Exhibit 15-2 Balance Sheet of Springfield National Bank In Exhibit 15-2, if Springfield National has excess reserves equal to $300, and the required reserve ratio increases to 35 percent, it will:

Exhibit 15-4 Balance sheet of Tucker National Bank The required reserve ratio in Exhibit 15-4 is:

In a simplified banking system with a 20 percent required reserve ratio, a $1,000 open-market sale by the Fed would cause the money supply to:

Exhibit 15-7 Lower Walloon National Bank In Exhibit 15-7, if Lower Walloon National bank loans out all of its excess reserves to James Brown so that Mr. Brown can upgrade his restaurant, and the money is put into Mr. Brown's account at the Lower Walloon National bank, then the bank will have reserves of:

Which of the following will make the real-world money multiplier smaller than the theoretical formula?

The balance sheet for a commercial bank shows the bank's:

Which of the following correctly is the money multiplier?

An increase in the required reserve ratio by the Federal Reserve would:

The buying and selling of government securities by the Fed is known as:

When the Fed lowers the discount rate, it makes it:

Which of the following would appear on the asset side of a commercial bank balance sheet?