6. Suppose a bank has $200,000 in deposits, a required reserve ratio of 15 percent, and total reserves of
$100,000. Then it has excess reserves of:
A. $70,000.
B. $30,000.
C. Negative $100,000.
D. $200,000.
7. Suppose a bank has $1 million in deposits, a required reserve ratio of 25 percent, and total reserves of
$600,000. Then it has excess reserves of:
A. $250,000.
B. $600,000.
C. $350,000.
D. $1,000,000.
8. Suppose a bank has $100,000 in deposits, a required reserve ratio of 20 percent, and total reserves of
$20,000. Then this bank can make new loans in the amount of:
A. $100,000.
B. $20,000.
C. $40,000.
D. Zero.
9. If the banking system has a required reserve ratio of 25 percent, then the money multiplier is:
A. 4.0.
B. 1.25.
C. 0.25.
D. 0.2.
10. If the banking system has demand deposits of $100,000, total reserves equal to $15,000, and a required
reserve ratio of 10 percent, then the banking system can increase the volume of loans by:
A. $5,000.
B. $50,000.
C. $85,000.
D. $100,000.