Ec102_01__-__Ch_10_Monetary_System_S10 (1)

Ec102_01__-__Ch_10_Monetary_System_S10 (1) -...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
aea280471b2491e69de6b81b7f988ebed8a7630f.doc 1 1.  Suppose Mary puts money into a piggy bank so she can spend it later.  What function of  money does this illustrate?  2.  Suppose Bank A has $10,000 in deposits and $8,000 in loans.  What is its reserve ratio?  3.  Explain why banks can influence the money supply if the required reserve ratio is less than  100 percent. 4.  If the reserve ratio is 20 percent, how much money can be created from $100 of reserves?  Show your work. 5.  Draw a simple T-account for First National Bank of Me, which has $5,000 of deposits, a  reserve ratio of 10 percent, and excess reserves of $300. 6.  What is meant by the term " lender of last resort ?" In what circumstances might Bank of 
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/16/2010 for the course ECON 102 taught by Professor ? during the Spring '08 term at Waterloo.

Page1 / 2

Ec102_01__-__Ch_10_Monetary_System_S10 (1) -...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online