Bank A holds $1 million in required reserves and the required reserve ratio is 1

Question

Bank A holds $1 million in required reserves and the required reserve ratio is 10 percent. It follows that Bank A holds checkable deposit liabilities that total

Question 2 options:

$1 million.

$10 million.

$20 million.

$100,000 million.

If a person uses money to buy a pair of shoes, money is functioning as

Question 4 options:

a medium of exchange.

a store of value.

a unit of account ormeasurement.

none of the above

A single commercial bank must meet a 20% reserve requirement. If this bank has no excess reserves to begin with and $20,000 cash is deposited into a checking account in the bank, then the bank can safely increase its loans by a maximum of:

Question 5 options:

$4,000.

$20,000.

$2,000.

$16,000.

a medium of exchange.

a store of value.

a unit of account ormeasurement.

none of the above

A single commercial bank must meet a 20% reserve requirement. If this bank has no excess reserves to begin with and $20,000 cash is deposited into a checking account in the bank, then the bank can safely increase its loans by a maximum of:

Question 5 options:

$4,000.

$20,000.

$2,000.

$16,000.

Explanation / Answer

3.

Reserves = required reserve ratio*deposits

1 million = 10%*deposits

deposits=1 million/10%

deposits liabilities=10 million

we do first question only as per Chegg policy

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.