Exam 15: Money Creation

The figures in the table below are for a single commercial bank. All figures are in thousands of dollars. Refer to the data given above. If the required reserve ratio is 10 percent, the bank has excess reserves of:

A bank's checkable deposits shrinks from $40 million to $33 million. What happens to its required reserves if the required reserve ratio is 3%?

A bank owns a 10-story office building. In the bank's balance sheet, this would be listed as part of:

"Leverage" in finance refers to the:

A bank is in the position to make loans when required reserves:

Answer the question based on the following consolidated balance sheet for the commercial banking system. Assume the required reserve ratio is 12 percent. All figures are in billions of dollars: Refer to the above data. The claims of owners in the commercial banking system are equal to:

In the Federal funds market, a bank that needs to meet reserve requirements can borrow reserves, usually for a period:

A bank's required reserves can be calculated by:

A commercial bank has excess reserves of $5000 and a required reserve ratio of 20 percent. It makes a loan of $6000 to a borrower. The borrower writes a check for $6000 that is deposited in another commercial bank. After the check clears, the first bank will be short of reserves in the amount of:

When people withdraw money from their deposits in the banking system, the:

A bank's net worth is the:

The monetary multiplier can also be called the spending multiplier.

A commercial bank has excess reserves of $10,000 and a required reserve ratio of 20%. It grants a loan of $8,000 to a customer, who then writes out a check for $8,000 that is deposited in another bank. The first bank will find its reserves decrease by:

When bankers hold excess reserves:

When a bank's loan defaults, then the bank's reserves will decrease.

When a bank accepts additional deposits, its required reserves and excess reserves will both increase.

A commercial bank has checkable-deposit liabilities of $50,000 and a required-reserve ratio of 20 percent. What is the amount of required reserves?

A commercial bank has required reserves of $60 million and the reserve ratio is 20 percent. How much are the commercial bank's checkable-deposit liabilities?

The figures in the table below are for a single commercial bank. All figures are in thousands of dollars. Refer to the data given above. This bank has liabilities and net worth totaling:

The commercial banking system has excess reserves of $200,000. Then new loans of $800,000 are subsequently made, and the system ends up just meeting its reserve requirements. The required reserve ratio must be: