Assume excess reserves = R2 million; the excess ratio : required reserves = 2:1; Calculate the total reserves; reserve requirement, and total deposits. A) R1mil, 10%, R10mil B) R1mil, 10%, R5mil C) R3mil, 5%, R20mil D) R3mil, 5%, R10mil
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Assume
A) R1mil, 10%, R10mil
B) R1mil, 10%, R5mil
C) R3mil, 5%, R20mil
D) R3mil, 5%, R10mil
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- When $100 is deposited in the banking system, it leads to maximum expansion in bank deposits of $1,000. What is the required reserve ratio assuming that the excess reserves are 0 Question 7 options: 10% 5% 0% 20%Q) An economy has high powered money of $10 million. If cash drain is known to be 10%, find the required reserve ratio to ensure that total deposit by commercial banks will be $80 million without any excess reserve A. 2.50% B. 5% C. 10% D. 20%it required reserve ratio (RRR) is 25%, the money multiplier is
- Excess reserves are equal to Required reserves – total reserves Total reserves – required reserves Nonborrowed reserves – borrowed reserves Total reserves – discounted reservesQ) An economy has high powered money of $10 million. If cash drain is known to be 10%, find the required reserve ratio to ensure that total deposit by commercial banks will be $80 million without any excess reserve. A. 2.50% B. 5% C. 10% D. 20% Solve this earlySuppose an individual deposits $1,500 into her chequing account, which eventually leads banks to increase cash reserves of $1,500 and initiates $36,000 in additional loans. The target reserve ratio is [blank1]%. Specify your answer in percentage terms, rounded to 1 decimal place.
- If R = 25%, actual reserves are $450 and checkable deposits are $1,800, then the monetarymultiplier is ____, required reserves are $____, excess reserves are $____, and the bankingsystem could potentially expand the money supply by $____.Assume Company X deposits $100,000 in cash in commercial Bank A. If no excess reserves exist at the time this deposit is made and the reserve ratio is 25 percent, Bank A can increase the money supply by a maximum of A) $75,000. B) $500,000. C) $80,000. D) $180,000.The Required Reserve Ratio is 25% for all banks. Assuming that all the customers that have outstanding loans have used all of those additional funds to invest in new machinery for their businesses (therefore, the amount of Checkable Deposits is the true liability the bank has to its customers), then $_____________ is the resulting change to the loan creating potential of the whole system (these three banks) as a result of Second National Bank customers depositing an additional $400,000 in their Checkable Deposit accounts. (Do NOT enter the '$' in your response. Enter a whole dollar amount; do NOT enter cents.) in new loans.
- In defining money as M1 economists exclude time deposits on the grounds that _________. a. the intrinsic value of time deposits is nothing. b. the purchasing power of time deposits is much less stable than that of demand deposits and currency. c. they are not directly or immediately a medium of exchange. d. they are not recognized by the government as legal tender. e. They are quantitatively negligible as compared to checkable deposits.If a bank has excess reserves of R4,000 and demand deposit liabilities of R100,000, and if the reserve requirement is 15 percent, then the bank has actual reserves of A) R17,000. B) R19,000. C) R24,000. D) R29,000.What does an exponential reserve index assume? Group of answer choices A All other reserves will never be found B that consumption will increase exponentially C that consumption will decrease exponentially D that consumption will increase linearly At what point will a resource extracting firm operate? Group of answer choices A Where average revenue equals marginal cost B marginal cost exceeds marginal revenue C Where marginal revenue equals marginal cost D Where marginal revenue exceeds marginal cost