3 Written questions
3 Multiple choice questions
- 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.
- The funds that a bank has on deposit at the Federal Reserve Bank of its district (plus its vault cash).
- The interest rate banks and other depository institutions charge one another on overnight loans made out of their excess reserves.
3 True/False questions
Fractional reserve banking system → The funds that a bank has on deposit at the Federal Reserve Bank of its district (plus its vault cash).
Balance sheet → The currency a bank has in its vault and cash drawers.
Vault cash → A statement of the assets, liabilities, and net worth of a firm or individual at some given time.