A Nonborrowed reserves declined offsetting the increase in the monetary base B

A nonborrowed reserves declined offsetting the

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A) Nonborrowed reserves declined, offsetting the increase in the monetary base. B) The excess reserve-deposit ratio rose significantly, resulting in a much smaller money multiplier. C) The currency-deposit ratio rose significantly, resulting in a much smaller money multiplier. D) The Fed increase the required reserve ratio, resulting in a much smaller money multiplier. 51) The size of the money multiplier depends upon all of the following EXCEPT A) the discount rate. B) the required reserve ratio. C) the currency-deposit ratio. D) excess reserves relative to deposits. 52) If currency outstanding equals $500 million, checkable deposits equal $2 billion, reserves equal $200 million, and the required reserve ratio is 0.10, the money multiplier equals A) 3.57. B) 4.35. C) 5. D) 1.14. 53) If banks hold no excess reserves, checkable deposits total $1.5 billion, currency totals $400 million, and the required reserve ratio is 10%, then the monetary base equals A) $1.9 billion B) $550 million. C) $1.54 billion. D) $15 billion.
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54) If the required reserve ratio is equal to 10 percent, a single bank can increase its loans up to a maximum amount equal to A) 10 times its excess reserves. B) its excess reserves. C) 10 percent of its excess reserves. D) its total reserves. 55) In the simple deposit expansion model, if the Fed purchases $100 worth of bonds from a bank that previously had no excess reserves, deposits in the banking system can potentially increase by A) $10. B) $100. C) $100 times the reciprocal of the required reserve ratio. D) $100 times the required reserve ratio. 56) Suppose that a bank with no excess reserves receives a deposit into a checking account of $10,000 in currency. If the required reserve ratio is 0.20, what is the maximum amount that the bank can lend out? A) $8,000 B) $50,000 C) $2,000 D) $10,000 57) If the Fed purchases $1 million worth of securities and the required reserve ratio is 8%, by how much will deposits increase (assuming no change in excess reserves or the public's currency holdings)? A) rise by $12.5 million B) rise by $8 million C) decline by $1 million D) rise by $1 million 58) Which of the following is a liability of the Fed? A) discount loans to banks B) checkable deposits in commercial banks C)
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U.S. government securities D) currency in circulation 59) If the Fed sells securities worth $10 million to a commercial bank, the Fed's balance sheet will show A) a decrease in securities held of $10 million and a decrease in bank reserves of $10 million. B) an increase in securities held of $10 million and a decrease in bank reserves of $10 million. C) a decrease in securities held of $10 million and an increase in bank reserves of $10 million. D) an increase in securities held of $10 million and an increase in bank reserves of $10 million. 60) When the federal funds rate equals the discount rate A) the demand curve for reserves is vertical. B) the supply curve of reserves is horizontal. C) the demand curve for reserves is horizontal. D) the supply curve of reserves is vertical. 61) In the market for reserves, if the federal funds rate is above the interest rate paid on excess reserves and below discount rate, an open market purchase ________ the ________ of reserves which causes the federal funds rate to fall, everything else held constant.
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  • Spring '13
  • Chikhladze
  • Monetary Policy, Federal Reserve System, federal funds rate

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