9. Which of the following is true about a standard bank balance sheet?I. An increase in the value of the bank’s assets must be accompanied by an increase in the liabilities of the bankII. A bank currently has $1000 in assets and a leverage ratio of 5. If the value of the assetsare cut in half, the leverage ratio will rise to 10.III. If a bank with $100 in deposits is keeping $20 in reserves, the reserve requirement must be 20%a) None of them are trueb) Only II is truec) Only III is trued) Only I and II are truee) Only I and III are true.
10. A consumer takes $1000 cash out of a jar and puts it in her checking account at the bank.. All banks always hold 20% of their deposits in reserve, loan out the rest, and nobody getting these loans holds any addition cash. Which of the following is true?I. There is no change in the money supply since both cash and checking deposits are in M1II. Total reserves in the banking system go up by $1000III. The money supply goes up by $5000