Exam 15: The Money Supply Process

If the money multiplier is equal to 2 and the money supply is equal to $100 billion, the monetary base is equal to ________.

When the Bank of Canada extends a loan to a bank, the monetary base ________ and reserves ________.

If a bank has excess reserves of $15000 and demand deposit liabilities of $80000, and if the reserve requirement is 20 percent, then the bank has total reserves of ________.

If the desired reserve ratio is one-third, currency in circulation is $300 billion, and chequable deposits are $900 billion, then the level of excess reserves in the banking system is ________.

Decisions by depositors to increase their holdings of ________, or of banks to hold ________ will result in a smaller expansion of deposits than the simple model predicts.

Assuming initially that r = 10 percent and c = 40 percent, a decrease in r to 5 percent causes ________.