# CPA19 - ECO202 CPA 19 for Thursday March 27 Name MyEconLab Quiz 4 on Thursday March 27 from 4:00p.m 10:00p.m over the dynamic ADAS model and CPAs

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ECO202 CPA 19 for Thursday, March 27 Name: ___________________________________ __ MyEconLab Quiz 4 on Thursday, March 27 from 4:00p.m. – 10:00p.m. over the dynamic AD-AS model and CPAs 18-19. Read in the Hubbard/O’Brien text Ch. 13, “Money, Banking, & the Federal Reserve System,” pp. 444-452. 1. Define the simple deposit multiplier & what does it equal in terms of the required reserve ratio? If the required reserve ratio equals 25%, an increase in bank reserves of \$100,000 will lead to how large of an increase in checking account deposits? 1. Simple deposit method- the ratio of the amount of deposits created by banks to the amount of new receivers. 2.\$75,000 2. Using Solved Problem 13-3 as a guide, work Problem 3.9 on p. 463. 3. Define a fractional reserve banking system . Given that a bank has loaned out most of its deposits, how does the bank get funds to cover withdrawals on days where the amount of money deposited is a small amount less than withdrawals? Next, how can one bank handle a

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## This note was uploaded on 04/20/2008 for the course ECON 202 taught by Professor Gilllete during the Spring '08 term at Kentucky.

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CPA19 - ECO202 CPA 19 for Thursday March 27 Name MyEconLab Quiz 4 on Thursday March 27 from 4:00p.m 10:00p.m over the dynamic ADAS model and CPAs

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