41. The discount rate is the interest rate that banks charge one another for loa

Question

41. The discount rate is the interest rate that
       banks charge one another for loans.
       banks charge the Fed for loans.
       the Fed charges banks for loans.
       the Fed charges Congress for loans.

Assets

Liabilities

Reserves             $2,000

Deposits          $10,000

Loans                   8,000

Assets

Liabilities

Reserves

     $19,200

Deposits

$240,000

Loans

     228,000

Question 42. 42. The manager of the bank where you work tells you that the bank has $300 million in deposits and $255 mil-lion dollars in loans. If the reserve requirement is 10 percent, how much is the bank holding in excess reserves?        $15 million
       $19.5 million
       $25.5 million
       $30 million

Explanation / Answer

Ans 41. the Fed charges banks for loans. Ans 43. Store of value Ans 44. currency, demand deposits, money market mutual funds Ans 47. store of value Ans 48. generally lend out a majority of the funds deposited. Ans 49. Inflation but not employment (in long run)

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