175.When the Fed decreases the required reserve ratio, then the:
PTS:1DIF:ETOP:Required reserve ratioTYP:SA176.A lowering of the required reserve ratio might notexpand the money supply if:
PTS:1DIF:MTOP:Required reserve ratioTYP:SA177.Assume that the Paris First National Bank is a thriving bank with deposits of $20 million. If the required reserve ratio is 20 percent and the bank is fully loaned out, the bank will have outstanding loans totaling:
PTS:1DIF:MTOP:Required reserve ratioTYP:RE178.Assume that the Paris First National Bank currently has deposits of $20 million. If the current requiredreserve ratio is raised from 20 percent to 40 percent, then:a.Paris First National Bank does not have to comply with the Federal Reserve mandate.b.required reserves will decrease from $16 million to $12 million.c.excess reserves will automatically increase by $20 million.d.Paris First National Bank must close out 4 million in loans.e.Paris First National Bank must increase its required reserves from $4 million to $8 million.ANS:E
PTS:1DIF:MTOP:Required reserve ratioTYP:CA179.Assume that the Paris First National Bank's loan position contracted from $16 million to $12 million. Ifthe required reserve ratio was increased from 20 percent to 40 percent, how much would the money supply shrink?
PTS:1DIF:DTOP:Required reserve ratioTYP:CA