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If the reserve ratio is 5 percent and a bank

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72. If the reserve ratio is 5 percent and a bank receives a new deposit of $500, this bank;a. must increase its required reserves by $25.;b. will initially see its total reserves increase by $500.;c. will be able to make a new loan of $475.;d. All of the above are true.;73. If the reserve ratio is 10 percent and a bank receives a new deposit of $10, this bank;a. must increase required reserves by $1.;b. will initially see its total reserves increase by $1.;c. will be able to make new loans up to a maximum of $1.;d. All of the above are true.;74. If the reserve ratio is 5 percent and a bank receives a new deposit of $200, it;a. must increase required reserves by $190.;b. will initially see reserves increase by $190.;c. will be able to make new loans up to a maximum of $190.;d. None of the above is true.

 

Paper#29668 | Written in 18-Jul-2015

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