2000 worth of new money 10000 worth of new money 40000 worth of new money

2000 worth of new money 10000 worth of new money

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$2,000 worth of new money. $10,000 worth of new money. $40,000 worth of new money. Correct! Correct! no new money. 1.25 / 1.25 pts Question 16 The quantity of reserves held by a bank in addition to the legally required amounts is known as: actual reserves. excess reserves. Correct! Correct! the required reserve ratio. the money multiplier. the monetary base. 0 / 1.25 pts Question 17 Excess reserves equal total reserves plus required reserves. True You Answered You Answered
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False Correct Answer Correct Answer 1.25 / 1.25 pts Question 18 Exhibit 15-2 Balance Sheet of Springfield National Bank Assets Liabilities Total reserves $500Demand deposits $1,000 Loans $500 In Exhibit 15-2, if Springfield National finds that it has excess reserves of $300, then the required reserve ratio must be: 30 percent. 0.30 percent. 0.80 percent. 0.20 percent. 20 percent. Correct! Correct! 1.25 / 1.25 pts Question 19 Assume all banks in the system started have a 10 percent required reserve ratio and the Fed made a $20,000 open market purchase. The result would be a(n): $200,000 expansion of the money supply. Correct! Correct! $20,000 expansion of the money supply. $20,000 contraction of the money supply. infinite contraction of the money supply.
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0 / 1.25 pts Question 20 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: $2 million. $4 million. You Answered You Answered $10 million. $16 million. Correct Answer $20 million. 0 / 1.25 pts Question 21 Which of the following policy actions by the Fed would cause the money supply to increase? An open market sale of government securities. You Answered You Answered An increase in required reserve ratios. A decrease in the discount rate. Correct Answer All of these. 1.25 / 1.25 pts Question 22 An increase in the discount rate by the Federal Reserve causes the money stock to expand. True False Correct! Correct!
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0 / 1.25 pts Question 23 Suppose the Fed sells $100 million of U.S. securities to the security dealers. If the reserve requirement is 20 percent, the currency holdings of the public are unchanged, and banks have zero excess reserves both before and after the transaction, the total impact on the money supply will be a: $100 million decrease. $500 million increase. You Answered You Answered $500 million decrease. Correct Answer Correct Answer $100 million increase. 1.25 / 1.25 pts Question 24 The required reserve ratio is required reserves stated as a percentage of the money supply. True False Correct! 1.25 / 1.25 pts Question 25 Assume we have a simplified banking system in balance-sheet equilibrium. Also assume that all banks are subject to a uniform 10 percent reserve requirement and demand deposits are the only form of money. A commercial bank receiving a new demand deposit of $100 would be able to extend new loans in the amount of: $10.
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