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5 Written questions

5 Matching questions

  1. Suppose a bank has $1,000,000 in deposits and a minimum reserve requirement of 20 percent. Then required reserves are
  2. LaTressa takes $230 from under her mattress and deposits it in her checking account. The immediate result of this transaction is that M1:
  3. If excess reserves are $30,000, demand deposits are $500,000 and the minimum reserve requirement is 10 percent, then total reserves are:
  4. Which of the following does not constrain deposit creation?
  5. Constraints on deposit creation include all of the following except:
  1. a $200,000
  2. b An increase in the money multiplier
  3. c Does not change in value
  4. d The decision by the Federal Reserve to reduce the minimum reserve requirement
  5. e $80,000

5 Multiple choice questions

  1. Pools of money used to buy interest-bearing bonds
  2. 4.00
  3. Bank reserves
  4. $500 million
  5. Unlimited

5 True/False questions

  1. Suppose the entire banking system has $10 million in excess reserves and a required reserve ratio of 5 percent. The deposit-creation potential of the banking system is:$200 million


  2. Use the following balance sheet for Bank of the Universe, which is one of many banks in a banking system.
    Table 13.2—Bank of the Universe Balance Sheet

    Refer to Table 13.2. With a required reserve ratio of 10 percent, Bank of the Universe can make new loans in the amount of:


  3. Suppose a bank has $50,000 in transactions accounts and a minimum reserve requirement of 10 percent. Then required reserves are$5,000


  4. Money is functioning as a store of value if youUse it to compare two houses in different price ranges


  5. BarterBanks make loans to borrowers


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