Exam 14: The Money Supply Process

Which of the following are NOT assets on the Fed's balance sheet?

Suppose that from a new checkable deposit,First National Bank holds two million dollars in vault cash,one million dollars in required reserves,and faces a required reserve ratio of ten percent. Given this information,we can say First National Bank has ________ million dollars in excess reserves.

Everything else held constant,an increase in the required reserve ratio will result in ________ in M1 and ________ in M2.

Assuming initially that the required reserve ratio = 15%,the currency-deposit ratio = 40%,and the excess reserve ratio = 5%,an increase in the excess reserve ratio to 10% causes the M1 money multiplier to ________,everything else held constant.

Suppose that from a new checkable deposit,First National Bank holds two million dollars in vault cash,nine million dollars in excess reserves,and faces a required reserve ratio of ten percent. Given this information,we can say First National Bank has ________ million dollars in required reserves.

Everything else held constant,an increase in the excess reserve ratio will mean ________ in the M1 money multiplier and ________ in the M2 money multiplier.

In the simple deposit expansion model,if the Fed purchases $100 worth of bonds from a bank that previously had no excess reserves,the bank can now increase its loans by

The money supply is ________ related to the nonborrowed monetary base,and ________ related to the level of borrowed reserves.

If a bank has excess reserves of $7,000 and demand deposit liabilities of $100,000,and if the reserve requirement is 10 percent,then the bank has actual reserves of

The monetary base increased by 20% during the contraction of 1929-1933,but the money supply fell by 25%. Explain why this occurred. How can the money supply fall when the base increases?

If a bank has excess reserves of $15,000 and demand deposit liabilities of $80,000,and if the reserve requirement is 20 percent,then the bank has total reserves of

Everything else held constant,an increase in the time deposit ratio will result in ________ in the M1 money multiplier and ________ in the M2 money multiplier.

In the simple deposit expansion model,if the banking system has excess reserves of $75,and the required reserve ratio is 20%,the potential expansion of checkable deposits is

Everything else held constant,an increase in the required reserve ratio on checkable deposits will cause

Reserves are equal to the sum of

Everything else held constant,if the sum of the required reserve ratio and the excess reserve ratio is less than one,an increase in the currency-checkable deposit ratio will mean

A bank has excess reserves of $6,000 and demand deposit liabilities of $100,000 when the required reserve ratio is 20 percent. If the reserve ratio is raised to 25 percent,the bank's excess reserves will be

If the required reserve ratio is 10 percent,currency in circulation is $400 billion,checkable deposits are $1,000 billion,and excess reserves total $1 billion,then the monetary base is

All else the same,when the Fed calls in a $100 discount loan previously extended to the First National Bank,reserves in the banking system

A bank has excess reserves of $1,000 and demand deposit liabilities of $80,000 when the reserve requirement is 20 percent. If the reserve requirement is lowered to 10 percent,the bank's excess reserves will be