ut yet answered Points out of 10.00 P Flag question The basic reason why the com
ID: 1174052 • Letter: U
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ut yet answered Points out of 10.00 P Flag question The basic reason why the commercial banking system can increase its checkable deposits by a multiple of its excess reserves is that Select one: 0 a. reserves lost by any particular bank will be gained by some other bank O b. the central banks follow policies that prevent reserves from falling below the level required by law c. the MPC of borrowers is greater than zero, but less than one d. the banking system must keep reserves equal to 100 percent of its checkable deposit liabilities Question 9 Not yet answered Points out of 10.00 P Flag question Which of the following resulted from the financial crisis of 2007-2008? Select one: a. A national bank holiday was declared that shut down banks for one week O C. The Fed raised interest rates to entice depositors to keep their money in O d. FDIC insura b. The Fed raised reserve requirements to limit the amount of lending by commercial banks as increased from $100,000 to (at least) $250,00 per accountExplanation / Answer
Q 8. Option a
The deposit multiplier is reciprocal of reserve ratio, and by reducing the reserve ratio deposit multiplier increases. Withdrawal of money reduces the money supply by the amount of withdrawal.
Q 9. Option d
The basic insurance amount is $100,000 per depositor per insured bank and because of financial crisis it was increased to #250,000 per account.
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