Exhibit 19-1 Balance sheet of First Iliad State Bank
Assets
Liabilities
Required reserves$ 1,000,000
Demand deposits$10,000,000
Excess reserves0
Loans$
In Exhibit 19-1, if the required reserve ratio is raised to 15 percent, First Iliad State will have to convert loans worth:
A. $9,000,000 to required reserves.
B. $1,500,000 to required reserves.
C. $500,000 to required reserves.
D. $1,000,000 to required reserves.
Answer: C
You might also like to view...
Fred's Widget Company has purchased $500,000 in equipment, which can be sold for a salvage value of $300,000 at any time. The best interest rate on alternative investments is 5%
What is the cost of using this machinery for one year? How would your answer be different if the machinery had not yet been purchased?
Which of the following is an example of an institutional investor?
a. A large pension fund b. A person who buys stocks for his portfolio c. A company that invests millions in a new product d. A dealer who buys a painting expecting huge returns
Which of the following statements best describes high-income economies’ relationship with inflation?
a. The high-income economies appear to have a political consensus to hold inflation low, but not the economic tools to do so. b. The high-income economies appear to have the economic tools to hold inflation low, but not the political consensus to do so. c. The high-income economies appear to have both a political consensus to hold inflation low, and the economic tools to do so. d. The high-income economies do not appear to have a political consensus to hold inflation low, and the economic tools to do so.
Assuming MPC is 0.80, what effect, if any, would an increase of $100 billion of U.S. exports have on the U.S. level of national income?
a. No effect since the goods would be consumed abroad b. National income increases by $100 billion c. National income decreases by $100 billion d. National income decreases by $500 billion e. National income increases by $500 billion