One key aspect of fractional reserve banking is that it Question 1 options: A) a

Question

One key aspect of fractional reserve banking is that it

Question 1 options:

A) allows banks to make loans.

B) requires the creation of a central bank.

C) make reserves unnecessary.

D) inhibits money creation.

In a commercial bank's T-account, checkable deposits are recorded as

Question 2 options:

A) debts.

B) profits.

C) assests.

D) liabilities.

In order for a bank to earn as much profit as possible, its excess reserves should be

Question 3 options:

A) equal to its required reserves.

B) as small as possible.

C) less than its vault cash.

D) growing at a constant rate.

A bank faces a required reserve ratio of 8 percent. If the bank has $300 million of checkable deposits and $28 million of total reserves, then how large are the bank's excess reserves?

Question 4 options:

A) $0

B) $2.24 million.

C) $3.5 million.

D) $4 million.

Explanation / Answer

1

A) allows banks to make loans.

2.

liabilities

3)

as small as possible

4)

then how large are the bank's excess reserves=28-300*8%=4 million

the above all are the answer

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