Chapter 16 Money and the Banking System

| November 9, 2018

45)
U.S. banks are required by law to keep most of their assets as reserves.

46)
If the reserve ratio is 0.3 and a deposit of $1,000 is made to the bank, the
bank can lend out $700.

47)
Banks will never hold any additional reserves beyond what is required.

48)
If the reserve ratio is 0.9, the money multiplier will be 10.

49)
When one individual writes a check to another individual the money supply will
not be changed.

50)
Explain liabilities and assets as they relate to a bank’s balance sheet.

51)
Explain why depositing cash into a checking account does not change the money
supply.

52)
Suppose that someone deposits $10,000 into a bank. Assuming a reserve
requirement ratio of 20%, what will be the eventual increase in checking
account balances?

53)
Why is the money multiplier in the United States smaller than the inverse of
the required reserve ratio?

54)
Explain why the money supply does not change when one individual writes a check
to another.

Get a 20 % discount on an order above $ 40
Use the following coupon code:
LOBSTER
Positive SSL