The banking system currently holds $20 billion in required reserves and zero excess reserves. The Fed lowers the required reserve ratio from 15 percent to 12.5 percent. Assuming that there are no cash leakages, the resulting change in checkable deposits (or the money supply) is approximately
A) $2.7 billion.
B) $1.5 billion.
C) $2.0 billion.
D) $12.5 billion.
E) $26.6 billion.
E
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Which of the following is likely to be true if the Fed buys government bonds held by the U.S. commercial banks? a. Banks will reduce the amount of loans, and this will increase the money supply in the economy. b. Banks will give more loans, and this will increase the money supply in the economy
c. Banks will give more loans, and this will decrease the money supply in the economy. d. Banks will reduce the amount of loans, and this will decrease the money supply in the economy.
Union leaders who focus on increasing the size of their union will generally accept a wage just above the competitive level.
Answer the following statement true (T) or false (F)
The additional utility derived from consuming one more unit of some good or service is called ____________.
Fill in the blank(s) with the appropriate word(s).
When market price is above equilibrium price
A. a shortage is generated. B. market price will rise. C. quantity supplied is greater than quantity demanded. D. None of these choices are correct.