When the fed raises the required reserve ratio then

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TB_Ch_19

170 .   When the Fed lowers the required reserve ratio , it :
a. lowers the cost of borrowing from the Fed , encouraging banks to make loans to the general public
b. raises the cost of borrowing from the Fed , discouraging banks from making loans to the general public .
c. increases the amount of excess reserves that banks hold , encouraging them to make loans to the general public .
d . increases the amount of excess reserves that banks hold , discouraging them from making loans to the general public .
e . decreases the amount of excess reserves that banks hold , discouraging them from making loans to the general public .
171 .   Which of the following actions by the FED would increase the money supply ?
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172 .   An increase in the required reserve ratio by the Federal Reserve would :
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173 .   When the Fed raises the required reserve ratio , it :
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174 .   When the Fed raises the required reserve ratio , then the :
a. ability of banks to make loans is restricted .
b. ability of banks to make loans is enhanced .
c. ability of banks to make loans is unaffected .
d . interest rate that banks pay to the Fed to borrow money is increased .
e. interest rate that banks pay to other banks to borrow money is increased .
175 .   When the Fed decreases the required reserve ratio , then the :
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176 .   A lowering of the required reserve ratio might not expand the money supply if :
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177 .   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 :
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178 .   Assume that the Paris First National Bank currently has deposits of $ 20 million . If the current required reserve 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 .
179 .   Assume that the Paris First National Bank 's loan position contracted from $ 16 million to $ 12 million . If the required reserve ratio was increased from 20 percent to 40 percent , how much would the money supply shrink ?
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180 .   Which of the following will make the real - world money multiplier smaller than the theoretical formula ?
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Chapter 25 / Exercise 57
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174.When the Fed raises the required reserve ratio, then the:a.ability of banks to make loans is restricted.b.ability of banks to make loans is enhanced.c.ability of banks to make loans is unaffected.d.interest rate that banks pay to the Fed to borrow money is increased.e.interest rate that banks pay to other banks to borrow money is increased.ANS:A
PTS:1DIF:ETOP:Required reserve ratioTYP:SA
We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
Exploring Economics
The document you are viewing contains questions related to this textbook.
Chapter 25 / Exercise 57
Exploring Economics
Sexton
Expert Verified
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

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