Given the following information about Metropolis Bank:
Bank Deposits $50,000
Loans 17,500
Required Reserves 30,000
Excess Reserves 2,500
The required reserve ratio must be
A) 75 percent. B) 60 percent. C) 30 percent. D) 15 percent.
B
You might also like to view...
The retirement effect is
A. when people retire later than they normally would have due to Social Security. B. when people decide not to retire at all because of problems with Social Security. C. when people retire earlier than they normally would have due to Social Security. D. when people save less for their retirement due to Social Security.
The Keynesian short-run aggregate supply curve in the simplified Keynesian model is unrealistic because
A) a vertical curve does not make economic sense. B) prices and wages will never decrease. C) the classical model is better in explaining how the economy operates. D) some price adjustments do take place in the short run.
One reason economies always experience some unemployment is job search
a. True b. False Indicate whether the statement is true or false
Table 29-1Effects of an open-market transaction on the balance sheets of banks and the fed (in millions of dollars) Banks ? Federal Reserve System ? Assets Liab. Assets Liab. Reserves +$10 ? U.S. Gov’t Bank Reserves U.S. Gov’t ? Sec. +$10 +$10 Securities?$10 ? ? ? ? In Table 29-1, if the required reserve ratio is 10 percent, what will happen to the money supply? Use the oversimplified money multiplier in your calculations.
A. The money supply will decrease by $100 million. B. The money supply will decrease by $10 million. C. The money supply will not change. D. The money supply will increase by $10 million. E. The money supply will increase by $100 million.