30. Assume a 10% reserve requirement. If a customer came into the Bank and depos

Question

30. Assume a 10% reserve requirement. If a customer came into the Bank and deposited S 1,000 in cash for credit to her demand deposit account (a) Friedman National's assets would increase by $900 (b) Friedman National Bank would be able to make an additional loan of Si ,000 (c) Friedman National's liabilities would increase by $1,000 (d) all of the above 31. Large banks that advertise the attributes of their financial products, the special services they provide to customers and the unique features of their credit cards are engaging in (a) oligopoly market behavior (b) product differentiation (c) market share domination (d) all of the above 32. If prices increase, the purchasing power value of money created by banks declines, but purchasing power value of legal tender money remains unchanged 33. The currency, US c checkbook money (o) US consumers and business firms willingly exchange goods and services for US checkbook money (d) all of the above reason we accept checkbook money as "money" in the US is because (a) unlike US heckbook money is backed by gold (b) the FDIC guarantees the value of US 34. If the US government offered to sell $1 bills for 50 cents (only on July 4), the demand curve -for SI bills on July 4 (at the 50 cent price) would become (a) perfectly vertical (inelastic) (b) perfectly horizontal (elastic) (c) perfectly curved (unit elastic) (d) upward sloping 35. Loans and investments made by banks are not counted in the US GDP measure because these activities do not result in the production of domestic goods (i.e., domestic product).

Explanation / Answer

Ans 30)

Reserve requirement is 10% then each of dollar deposit made $0.1 will be reserved and $0.9 would be added into Assets

Hence option A is correct response

Ans 31)

The similar products these banks advertise hence it is kind of product differentiation

Hence option B) is the correct response

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