A bank has no excess reserves. Then it receives a new deposit for $100,000. If it has a desired reserve ratio of 20 percent, by how much can it increase its loans?
A) $20,000
B) $80,000
C) $120,000
D) $180,000
B
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It is possible to represent three dimensions on a two-dimensional graph by using
A. a contour map. B. a razor blade. C. curved lines. D. All of these responses are correct.
Everything else held constant, if a central bank makes a sterilized sale of foreign assets, then the domestic currency will
A) appreciate. B) depreciate. C) either appreciate, depreciate, or remain constant. D) not be affected.
If the Fed wants to lower the interest rate, it will
a. increase the money supply b. decrease the money supply c. increase money demand d. decrease money demand e. simply set a lower market interest rate
According to the quantity theory of money, a 3 percent increase in the money supply
a. causes the price level to rise by 3 percent. b. causes the price level to rise by less than 3 percent. c. leaves the price level unchanged. d. causes the price level to fall by 3 percent.