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Last Bank of Cedar Bend

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solution


Question

Last Bank of Cedar Bend;Assets Liabilities;Reserves $25,000 Deposits $150,000;Loans $125,000;80. If the reserve requirement is 10 percent, this bank;a. is in a position to make a new loan of $15,000.;b. has less reserves than required.;c. has excess reserves of less than $15,000.;d. None of the above are correct.;81. If the reserve requirement is 10 percent and then someone deposits $50,000 into the bank, it will;a. have $65,000 in excess reserves.;b. have $55,000 in excess reserves.;c. need to raise reserves by $5,000.;d. None of the above are correct.;83. If the Last Bank of Cedar Bend is holding $10,000 in excess reserves, the reserve requirement is;a. 2 percent.;b. 5 percent.;c. 7 percent.;d. 10 percent.;84. If a bank uses $80 of reserves to make a new loan when the reserve ratio is 25 percent;a. the money supply initially decreases by $80.;b. the money supply initially increases by $20.;c. the money supply will eventually increase by more than $20 but less than $80.;d. the level of wealth in the economy will not change.

 

Paper#29676 | Written in 18-Jul-2015

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