201_HW7_(12-04-09) - Due: 06/23/09 ECO201: MACROECONOMICS...

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Due: 06/23/09 ECO201: MACROECONOMICS Homework #7 Multiple-Choice Questions (one point each): 1. A bank that has assets of $85 billion and a net worth of $10 billion must have: A) liabilities of $75 billion. B) excess reserves of $10 billion. C) liabilities of $10 billion. D) excess reserves of $75 billion. 2. The reserves of a commercial bank consist of: A) the amount of money market funds it holds. B) deposits at the Federal Reserve Bank and vault cash. C) government securities that the bank holds. D) the bank's net worth. 3. 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. 4. Most modern banking systems are based on: A) money of intrinsic value. B) commodity money. C) 100 percent reserves. D) fractional reserves. 5. Money is destroyed when: A) loans are made. B) checks written on one bank are deposited in another bank. C)
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201_HW7_(12-04-09) - Due: 06/23/09 ECO201: MACROECONOMICS...

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