Exam 11: Money and the Banking System

First Safety,a chartered bank,has $6 000 000 of outstanding demand deposits and actual reserves of $1 700 000.If the desired reserve ratio is 25 percent,what is the maximum loan the bank can extend?

(Multiple Choice)

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Question 41

Which of the following is NOT a form of money?

(Multiple Choice)

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Question 42

Suppose you found $10 000 hidden under a rock and deposited it in a demand deposit account at your bank.If the desired reserve ratio was 10 percent,how much would your deposit add to total demand deposits?

(Multiple Choice)

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Question 43

If a bank had demand deposits of $50 million and it desired a 25 percent reserve ratio,what is the maximum amount of dollars' worth of loans it would be able to have?

(Multiple Choice)

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Question 44

A bank receives a demand deposit of $3000.The bank loans out $1800 of this deposit and increases its excess reserves by $300.What is the desired reserve ratio?

(Multiple Choice)

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Question 45

Under fractional reserve banking,what occurs when a bank lends to a customer?

(Multiple Choice)

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Question 46

What does fractional reserve banking take its name from?

(Multiple Choice)

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Question 47

Money is the standard object used in exchanging goods and services.It can,therefore,be called the medium of exchange.

(True/False)

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Question 48

Are Canadian treasury bills held by individuals an asset or a liability for the government and individuals?

(Multiple Choice)

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Question 49

When can the process of money creation be reversed?

(Multiple Choice)

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Question 50

Why does gold work better than bananas as a form of money?

(Multiple Choice)

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Question 51

Financial institutions act as intermediaries between savers,who supply funds,and borrowers,who seek funds to invest.

(True/False)

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Question 52

If banks desired a 100 percent reserve ratio,what would a $10 000 addition to banking reserves increase the money supply by?

(Multiple Choice)

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Question 53

Which of the following is NOT a function of money?

(Multiple Choice)

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Question 54

If individuals will no longer take a currency as a method of payment,is it still considered to be money?

(Multiple Choice)

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Question 55

If a bank has a reserve ratio of 10 percent,what is the money multiplier?

(Multiple Choice)

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Question 56

Savings accounts are the most liquid of all assets because they can be quickly and easily transferred.

(True/False)

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Question 57

Credit cards should be included in M2 because they are just like cheques.

(True/False)

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Question 58

Which of the following events would tend to cause the money supply to rise?

(Multiple Choice)

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Question 59

Assume the desired reserve ratio is 10 percent.First National Bank has vault cash and deposits with the Bank of Canada of $40 million,loans and securities of $360 million,and demand deposits of $400 million.Which of the following statements about First National is the most accurate?

(Multiple Choice)

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Question 60

Showing 41 - 60 of 164

First Safety,a chartered bank,has $6 000 000 of outstanding demand deposits and actual reserves of $1 700 000.If the desired reserve ratio is 25 percent,what is the maximum loan the bank can extend?

Which of the following is NOT a form of money?

Suppose you found $10 000 hidden under a rock and deposited it in a demand deposit account at your bank.If the desired reserve ratio was 10 percent,how much would your deposit add to total demand deposits?

If a bank had demand deposits of $50 million and it desired a 25 percent reserve ratio,what is the maximum amount of dollars' worth of loans it would be able to have?

A bank receives a demand deposit of $3000.The bank loans out $1800 of this deposit and increases its excess reserves by $300.What is the desired reserve ratio?

Under fractional reserve banking,what occurs when a bank lends to a customer?

What does fractional reserve banking take its name from?

Money is the standard object used in exchanging goods and services.It can,therefore,be called the medium of exchange.

Are Canadian treasury bills held by individuals an asset or a liability for the government and individuals?

When can the process of money creation be reversed?

Why does gold work better than bananas as a form of money?

Financial institutions act as intermediaries between savers,who supply funds,and borrowers,who seek funds to invest.

If banks desired a 100 percent reserve ratio,what would a $10 000 addition to banking reserves increase the money supply by?

Which of the following is NOT a function of money?

If individuals will no longer take a currency as a method of payment,is it still considered to be money?

If a bank has a reserve ratio of 10 percent,what is the money multiplier?

Savings accounts are the most liquid of all assets because they can be quickly and easily transferred.

Credit cards should be included in M2 because they are just like cheques.

Which of the following events would tend to cause the money supply to rise?

Assume the desired reserve ratio is 10 percent.First National Bank has vault cash and deposits with the Bank of Canada of $40 million,loans and securities of $360 million,and demand deposits of $400 million.Which of the following statements about First National is the most accurate?

The Role and Method of Economics

Scarcity, trade-Offs, and Production Possibilities

Supply and Demand

Bringing Supply and Demand Together

Introduction to the Macroeconomy

Measuring Economic Performance

Economic Growth in the Global Economy

Aggregate Demand

Aggregate Supply and Macroeconomic Equilibrium

Fiscal Policy

The Bank of Canada

Monetary Policy

International Trade

International Finance

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