If the required reserve ratio is 20%; excess reserves= 0; and individuals prefer to keep checking deposits than holding cash; then a deposit of 100 B.D will lead to an increase in the total amount of loans equal to...........B.D. OA 300 O B. 400 OC 500 O D. none of the above
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- Suppose Southeast Mutual Bank, Walls Fergo Bank, and PJMorton Bank all have zero excess reserves. The required reserve ratio is presently set at 5%. Sean, a Southeast Mutual Bank customer, deposits $200,000 into his checking account at the local branch.Change in Required Reserves(Dollars)Suppose Southeast Mutual Bank, Walls Fergo Bank, and PJMorton Bank all have zero excess reserves. The required reserve ratio is presently set at 10%. Eric, a Southeast Mutual Bank customer, deposits $250,000 into his checking account at the local branch. Complete the following table to reflect any changes in Southeast Mutual Bank's T-account (before the bank makes any new loans). Assets Liabilities Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 10%. Hint: If the change is negative, be sure to enter the value as negative number. Amount Deposited Change in Excess Reserves Change in Required Reserves (Dollars) (Dollars) (Dollars) 250,000 Now, suppose Southeast Mutual Bank loans out all of its new excess reserves to Cho, who immediately uses the funds to write a check to Bob. Bob deposits the funds immediately into his checking…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%
- Suppose 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.A friend of yours produces 7,000 counterfeit one-dollar bills. Assume that the bills are undetectable with current technology and that the required reserve ratio is 20%. (a) What would be the maximum increase in the money supply? (b) Give two reasons as to why the actual increase in the money supply may be smaller than your answer to (a).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 $____.
- 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%Bank Balance Sheet Assets Liability and Equity Required Reserves: $ 0.30 million Deposits: $ 1.50 million Excess Reserves: $ 1.80 million Equity: $ 1.50 million Government Bonds: $ 0.90 million There are 100 banks in the kingdom total, all of them with completely identical balance sheets as Typical Bank. People in our kingdom also hold an additional $10 million in cash. That means that (demand) deposits in our kingdom total how much? ______ MillionThe 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.
- Assume that the commercial banking system has 500TL of deposits and the banks hold no excess reserves. The required reserve ratio is 10%. If the Central Bank sells T-bills in the amount of 25TL and banks lend to the maximum extent permitted, assuming no cash drain, loans: a.decrease by 225TL b.decreases by 20TL c.decrease by 100TL d.increase by 25TL e.decrease by 25In 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.Suppose the required reserve ratio is 20%. What is the maximum amount of total money supply that can be created from an initial deposit of $200? In general, why might the actual amount of total money creation be less than the maximum?