When the central bank lowers the required reserve ratio, the banks' ability to make loans _and the money supply. Select one: O a. decrease; decreases O b. remain constant; decreases O c. increase; remain constant O d. increase; increases
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- Which set of actions could the central bank use to increase the money supply? Select one: O a. an open market purchase and a tax cut O b. a discount rate cut and an open market sale O c.a reduction in the required reserve ratio and an open market purchase O d. a reduction in the required reserve ratio and an open market saleIf a bank uses $100 of excess reserves to make a new loan when the reserve ratio is 25 percent, what happens to the money supply in the very short term? O a. It decreases by $100. O b. It increases by $25. O C. It decreases by $25. O d. It increases by $100. Show Transcribed Text Suppose a bank has $200,000 in deposits and $150,000 in loans. What is its reserve ratio? O a. 1 percent O b. 5 percent O C. 10 percent O d. 25 percent Show Transcribed Text Which list ranks the Bank of Canada's monetary policy tools from most to least frequently used? O a. bank rate changes; open-market transactions; reserve requirement changes O b. bank rate changes; reserve requirement changes; open-market transactions O c. open-market transactions; bank rate changes; reserve requirement changes O d. open-market transactions; reserve requirement changes; bank rate changesIf the Fed sells U.S. government securities to banks, the federal funds rate and banks' reserves O a. rises; increase O b. rises; decrease O c. falls; decrease O d. falls; increase O e. rises; do not change
- Suppose that a bank with no excess reserves receives a deposit into a checking account of $8,000 in currency. If the required reserve ratio is 0.20, what is the maximum amount that the bank can lend out? Select one: OA $1,600 O B. $6,400 OC $8,000 O D. $40,000Cash: $104.25 billion Checking deposits: $157.4 billion Saving accounts: $270.5 billion Small denomination time deposits: $20.3 billion Bank reserves held at the Fed: $33.0 billion Suppose that in a certain economy, the above are the only forms of money. How much M2 money is there? O a. $565.15 billion O b. $282.15 billion O c. $427.90 billion O d. $303.50 billion O e. $137.25 billion O f. $552.45 billionBecause banks tend to hold fractional reserve ratios, what can we conclude? O a. Bank run may be possible O b. All of the answers are correct O c. Deposit insurance may be needed to increase depositor confidence O d. Money creation through deposit creation is possible
- Suppose that in a certain banking system, the target reserve ratio is 45%. Keeping in mind the money multiplier, if the central bank in this economy wanted to expand the money supply by $400 billion, then by how much would this central bank need to increase the monetary base (MB)? O a. $355.00 billion O b. $72.50 billion O c. $180.00 billion O d. $11.25 billion O e. $27.59 billion f. $360.00 billion g. $7.27 billionThe changes in bank regulations expand the availability of credit cards so people need to hold less cash. Select one: O a. money supply decrease, money demand decrease, interest rate increase O b. money supply increase, money demand unchanged, interest rate decrease O c. money supply increase, money demand increase, interest rate decrease O d. money supply unchanged, money demand decrease and interest rate decrease O e. money supply decrease, money demand unchanged, interest rate increaseSuppose the required reserve ratio increased from 5 percent to 10 percent, and suppose banks kept no excess reserves. Ceteris paribus, it follows that the "money" (or "deposit") multiplier would: Select one: O a. decrease from 20 to 10. O b. increase from 5 to 10. O c. decrease from 10 to 20. O d. decrease from 1/5 to1/10.
- Trevor goes to the ATM machine and withdraws $500 in cash. How will this affect the monetary base? Select one: O a. The monetary base will decline as bank reserves fall. O b. The monetary base will increase with the increase in currency in circulation. O c. The monetary base will increase by less than the size of the withdrawal as the increase in the currency in circulation will not be completely offset by a decrease in bank reserves. O d. The monetary base will remain unchanged with the increase in the currency in circulation being exactly offset by a decrease in bank reserves.When the Federal Reserve sells Treasury bonds to the public, this will cause reserves in the banking system to and the money supply is likely to O decrease : decrease O increase : decrease O decrease : increase O increase : increase « Previous Next ASUS 15 RThe persons who are laid off when a supermarket closes because the manager did not run the business efficiently are considered to be Select one: O a. frictionally unemployed. b. seasonally unemployed. structurally unemployed. O C. d. cyclically unemployed. marginally unemployed.