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5 Written questions

5 Matching questions

  1. Constraints on deposit creation include all of the following except:
  2. Which of the following is not an essential characteristic of money
  3. 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
    Total Reserves: $150,000
    Other Assets: $850,000

    Transactions Accounts $1,000,000

    Refer to Table 13.2. With a required reserve ratio of 15 percent, Bank of the Universe would have excess reserves of
  4. Use the following balance sheet for XYZ Bank, which is one of many banks in a banking system.
    Table 13.1—XYZ Bank balance sheet
    Total Reserves $50,000
    Other Assets $150,000

    Transaction Accounts $200,000

    Refer to Table 13.1. With a required reserve ratio of 15 percent, XYZ Bank would have excess reserves of:
  5. If there is no minimum reserve requirement in the banking system, the potential ability of banks to create money is
  1. a It is backed by gold or silver
  2. b An increase in the money multiplier
  3. c Unlimited
  4. d $20,000
  5. e Zero

5 Multiple choice questions

  1. Bank reserves
  2. $80,000
  3. $200,000
  4. It creates a transactions-account balance for the borrower
  5. Money-market mutual funds

5 True/False questions

  1. For a single bank in a large banking system, excess reserves are equal to theAmount of loans a bank can make after meeting the reserve requirement


  2. Initially a bank has a minimum reserve requirement of 15 percent and no excess reserves. If $200,000 is deposited in the bank, then ceteris paribus:Excess reserves will increase by $170,000


  3. Suppose the entire banking system has $70,000 in excess reserves and a required reserve ratio of 25 percent. The deposit-creation potential of the banking system is$280,000


  4. Suppose Students Bank and Trust has zero excess reserves. If the required reserve ratio decreases:$280,000


  5. The total quantity of output demanded at alternative price levels in a given time period, ceteris paribus is the definition of:Aggregate demand


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