A bank's assets consist of $500,000 in total reserves, $1,600,000 in loans, and a building worth $1,200,000 . Its liabilities and capital consist of $2,000,000 in demand deposits and $1,300,000 in capital. If the required reserve ratio is 10 percent, what is the level of the bank's excess reserves? How much money could the excess reserves be used to create in the banking system as a result?
a. $200,000; $200,000
b. $200,000; $2,000,000
c. $300,000; $300,000
d. $300,000; $3,000,000
d
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The natural rate hypothesis asserts that
A) changes in the unemployment rate from changes in the inflation rate are temporary. B) changes in the unemployment rate are natural and long-lasting. C) when prices change, the inflation rate changes temporarily and then returns to its natural rate. D) changes in the natural unemployment rate are only temporary. E) price changes occur at a natural rate, near a 6 percent average inflation rate.
The government of a country Amenia imposes a ceiling on the price of bread. Which of the following is most likely to be true?
a. It implies that the price of bread prevalent in Amenia is higher than what the equilibrium price would have been. b. Imposing this price ceiling is likely to raise economic welfare in Amenia as the government tries to ensure that most people can at least afford bread. c. It will cause an excess demand for bread in the market. d. The market is likely to remain in equilibrium even after the price ceiling is imposed.
Seasonal or cyclical variation in a time series model
A. is regular in nature and can be accounted for by dummy variables. B. can decrease the accuracy of a forecast if not accounted for by dummy variables. C. exhibits irregular variation that can be accounted for by dummy variables. D. both a and b E. both b and c
Which of the following countries has the highest export ratio?
A. The United Arab Emirates. B. Japan. C. China. D. The United States.