Question 26. 26. In a system of 100-percent-reserve banking, (Points : 5) banks

Question

Question 26.26. In a system of 100-percent-reserve banking, (Points : 5)

       banks do not accept deposits.
       banks do not influence the supply of money.
       loans are the only asset item for banks.
       All of the above are correct.

Question 27.27. If the reserve ratio is 20 percent, the money multiplier is (Points : 5)

       2.
       4.
       5.
       8.

Question 28.28. If an economy uses silver as money, then that economy

Question 26.26. In a system of 100-percent-reserve banking, (Points : 5)

       banks do not accept deposits.
       banks do not influence the supply of money.
       loans are the only asset item for banks.
       All of the above are correct.

Explanation / Answer

26. All of the above are correct.

27. 5

28. is commodity money.

29. $500 of new money in the economy.

30. $700 of new reserves.

31. demand deposits

32. All of the above are correct.

33. the New York Federal Reserve Bank

34. lowers the discount rate or auctions more credit.

35. defer payments.

36. will initially see reserves increase by $400.

37.

38.answer is C 30,000
thesis= 1/ reserved ratio(%) * amount
therefore 1/0.06 * 1950=30,000.00

39. government bonds are conducted at the New York Fed

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