Would the maximum loan that a bank can make be different when receiving a discount loan from the Federal Reserve of $1 million versus receiving a checking account deposit of $1 million? Explain why or why not
What will be an ideal response?
They are different. Both increase the reserves at the bank by $1 million, but the bank does not have to hold required reserves against the discount loan because it is not a deposit. The entire $1 million of the discount loan is excess reserves, which the bank can loan out.
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To answer the following question, please refer to the figure below. Concentrating only at the lower left quadrant, discuss the relationship between the U.S. real money supply and the dollar/euro exchange rate, E$/E
What will be an ideal response?
Transactions accounts allow for direct payment to a third party.
Answer the following statement true (T) or false (F)
Figure 4-24
Refer to . The amount of deadweight loss associated with the tax is equal to
a.
P3 A C P1.
b.
A B C.
c.
P2 A D P3.
d.
P1 D C P2.
The highest income quintile receives about ______% of all income.
Fill in the blank(s) with the appropriate word(s).