3 Written questions
3 Multiple choice questions
- The fraction of checkable deposits that a bank must hold as reserves in a Federal Reserve Bank or in its own bank vault; also called the reserve requirement.
- The amount by which a bank's or thrift's actual reserves exceed its required reserves; actual reserves minus required reserves.
- The interest rate banks and other depository institutions charge one another on overnight loans made out of their excess reserves.
3 True/False questions
Monetary multiplier → The multiple of its excess reserves by which the banking system can expand checkable deposits and thus the money supply by making new loans (or buying securities); equal to 1 divided by the reserve requirement.
Fractional reserve banking system → The funds that a bank has on deposit at the Federal Reserve Bank of its district (plus its vault cash).
Required reserves → The amount by which a bank's or thrift's actual reserves exceed its required reserves; actual reserves minus required reserves.