Economics 1500

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Author:
Anonymous
ID:
26243
Filename:
Economics 1500
Updated:
2010-07-10 02:01:03
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Reserve Ratio
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Description:
Chapter 11
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  1. Financial sector of an economy
    transfers savings back into spending
  2. If the reserve ratio is .08, the simple money multiplier is
    12.5
  3. Short-term interest rates and long-term interest rates are determined in the ___ and ___, respectively.
    money market, loanable funds market
  4. If the required reserve ratio is .10 and individuals hold no cash, a new cash deposit of 2 million will increase the money supply a total of:
    20million
  5. Total reserves 100,000
    Demand Deposits 100,000
    Suppose it is the only bank and individuals hold no cash. Assuming the reserve ratio is 10 percent and that the bank does not want to hold excess reserves. What will be the bank's loans at the end of the money creation process?
    900,000
  6. When a cashier gives you a pair of jeans for your 20 bill, money is serving which function
    medium of exchange
  7. as the reserve ratio goes up, the simple money multiplier goes
    down and less money will be created
  8. If the requried reserve ratio is .20 and individuals hold no cash, a 5 million new cash deposit in the banking system will increase the money supply by a total amount of
    25 million
  9. Suppose the required reserve ratio is .15 and individuals hold no cash. Total bank deposits are 100 million and the bank holds 20 mill in reserves. How much additional money can the bank create if it does not hold excess reserves?
    33 million
  10. the measure of money most closely correlated with the price level and economic activity is
    m2
  11. total reserves 800,000
    demand deposits 800,000
    If reserve ratio is 5 percent, this bank is in a position to make a max new loan of
    760,000
  12. Non liquid assets are able to perform which of the following functions
    store of value
  13. required reserve ratio refers to the ratio of a banks
    required reserves to its deposits
  14. When bank offer checking accounts they are issuing a
    finanical asset that functions as money
  15. A single bank has a reserve requirement of 10 percent. If a customer deposits 100 million, the bank may lend how much of this new deposit
    90 million
  16. Small denomination time deposits are included in
    m2
  17. total reserve 800,000
    demand deposit 800,000
    If the reserve ratio is 5 percent, how much does this bank have in excess reserves
    760,000
  18. total reserve 100,000
    demand deposits 100,000
    Assumint the reserve ratio is 10 percent, what will be the banks required reserves at the end of the money creation process
    100,000
  19. total reserve 100,000
    demand deposits 100,000
    Assumint the reserve ratio is 10 percent, what will be the banks excess reserves at the end of the money creation process
    zero

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