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Answer 1. the next question(s) on the basis of the following table for a commercial bank or thrift: Refer to the above table. When the legal reserve ratio is 30 percent, the monetary multiplier is: A) 5. B) 4. C) 3.33. D) 2.5. Refer to row 1 in the above table. The number appropriate for space W is: A) 4. B) 6. C) 10. D) 12. 3. Individual commercial banks are limited in their ability to create money by lending because: A) lending is likely to result in the loss of reserves to other banks. B) only the Treasury and the Federal Reserve Banks are authorized to create new money. C) the Board of Governors prohibits bank lending when the result is an expansion of the money supply. D) banking is a highly competitive industry. 4. Commercial banks monetize claims when they: A) collect checks through the Federal Reserve System. B) make loans to the public. C) accept repayment of outstanding loans. D) borrow from the Federal Reserve Banks. 5. (Last Word) The bank panics of 1930-1933: A) resulted in the passage of the Smoot-Hawley Act. B) boosted the nation's money supply, causing inflation. C) directly resulted in the Federal insured deposit D) program. caused a significant outflow of gold from the United States. 6. Overnight loans from one bank to another for reserve purposes entail an interest rate called the: A) prime rate. B) discount rate. C) Federal funds rate. D) treasury bill rate. 7. If m equals the maximum number of new dollars that can be created for a single dollar of excess reserves and R equals the required reserve ratio, then for the banking system: A) m = R-1. B) R = m/1. C) R = m-1. D) m = 1/R. 8. Which of the following is correct? A) Required reserves minus actual reserves equal excess reserves. B) Required reserves equal excess reserves minus actual reserves. C) Required reserves equal actual reserves plus excess reserves. D) Actual reserves minus required reserves equal excess reserves. 9. When a commercial bank has excess reserves: A) it is in a position to make additional loans. B) its actual reserves are less than its required reserves. C) it is charging too high an interest rate on its loans. D) its reserves exceed its assets. Refer to row 4 in the above table. The number appropriate for space Z is: A) $10,000. B) $70,000. C) $48,000. D) zero. ... View Full Document

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