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When a check is cleared against a bank, it will lose:
  • Increased by $2,000
  • the size of the monetary multiplier would increase.
  • Checkable deposits and reserves,
  • Banks can create money through lending their reserves.
A commercial bank has actual reserves of 50,000andcheckabledepositsof200,000 and the required reserve ratio is 20%. The excess reserves of the bank are:
  • 50,000and200,000
  • the size of the monetary multiplier would increase.
  • $10,000
  • Increased by $2,000
Assume that Johnson deposits 350ofcurrencyinhisaccountintheXYZbank.LaterthesamedaySwansonnegotiatesaloanfor2,000 at the same bank. In what direction and by what amounts has the supply of money changed?
  • Increased by $2,000
  • 50,000and200,000
  • $10,000
  • Checkable deposits and reserves,
What is one significant characteristic of fractional reserve banking?
  • Banks can create money through lending their reserves.
  • Checkable deposits and reserves,
  • Increased by $2,000
  • the size of the monetary multiplier would increase.
Assume that the legally required reserve is 15 percent and commercial banks choose to hold additional excess reserves equal to 5 percent of any newly acquired deposits. Under these circumstances the monetary multiplier for the commercial banking system is:
  • Increased by $2,000
  • 5.0
  • $10,000
  • 50,000and200,000
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