chapter 32 homework

# chapter 32 homework - 1 Sharon sells a government security...

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1. Sharon sells a government security worth \$4,600,000 to the Federal Reserve Bank of Kansas City. She deposits these funds in her checking account to the First Commerce Bank. Her checking account had a \$150,000 balance before the sale of the security. The reserves of the First Commerce Bank would: A) Increase by \$4,750,000 B) Increase by \$4,600,000 C) Decrease by \$4,600,000 D) Decrease by \$4,450,000 2. If the required reserve ratio were 15 percent, the value of the monetary multiplier would be: A) 5.50 B) 6.67 C) 7.32 D) 8.54 3. A commercial bank has required reserves of \$6,000 and the reserve ratio is 20 percent. What are the commercial bank's checkable-deposit liabilities? A) \$1,200 B) \$9,000 C) \$30,000 D) \$120,000 4. A depositor places \$10,000 in cash in a commercial bank, and the reserve ratio is 10 percent. The bank sends the \$10,000 to its Federal Reserve Bank. As a result, the actual reserves, the required reserves, and excess

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## This note was uploaded on 03/29/2010 for the course ECON 112 taught by Professor Smith during the Spring '10 term at Bowling Green.

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chapter 32 homework - 1 Sharon sells a government security...

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