Pre-Test Chap 32 e18

# Pre-Test Chap 32 e18 - Pre-Test Chap 32 e18 Student 1...

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Pre-Test Chap 32 e18 Student: ___________________________________________________________________________ 1. Assume the required reserve ratio is 16.67 percent and that the commercial banking system has \$110 million in excess reserves. The maximum amount of money which the banking system could create is: A. \$110 million B. \$330 million C. \$660 million D. \$1,353 million Answer the next question(s) based on the following consolidated balance sheet for the commercial banking system. Assume the required reserve ratio is 30 percent. All figures are in millions of dollars 2. Refer to the above data. The commercial banking system can expand the supply of money by a maximum of: A. \$23.5 million B. \$36.5 million C. \$51.9 million D. \$66.6 million 3. If the reserve ratio is 25 percent, what level of excess reserves does a bank acquire when a business deposits a \$12,000 check drawn on another bank? A. \$3,000 B. \$6,000 C. \$9,000 D. \$12,000 4. When bankers hold excess reserves: A. The size of the monetary multiplier increases B. The money-creating potential of the banking system increases C. The money-creating potential of the banking system decreases D. There is no change in the money-creating potential of the banking system 5. The reserve ratio is equal to: A. A commercial bank's checkable-deposit liabilities divided by its required reserves B. A commercial bank's required reserves divided by its checkable-deposit liabilities C. A commercial bank's checkable-deposit liabilities multiplied by its excess reserves D. A commercial bank's excess reserves divided by its required reserves

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Answer questions 104-107 on the basis of the following consolidated balance sheet for the commercial banking system. All figures are in billions. Assume that the required reserve ratio is 10 percent 6. Refer to the above information. The maximum amount by which this commercial banking system can expand the supply of money by lending is: A. \$120 billion B. \$300 billion C. \$480 billion D. \$600 billion 7. The Norfolk Bank has \$18,000 in excess reserves and the reserve ratio is 20 percent. Which level of checkable deposits and reserves might this bank hold? A. \$160,000 in checkable-deposit liabilities and \$47,000 in reserves
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Pre-Test Chap 32 e18 - Pre-Test Chap 32 e18 Student 1...

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