Chapter 16 Money and the Banking System

| November 9, 2018

15)
Given the following information about Metropolis Bank:
Bank Deposits $50,000
Loans 17,500
Required Reserves 30,000
Excess Reserves 2,500

The
required reserve ratio must be
A)
75%.
B)
60%.
C)
30%.
D)
15%.

16)
Suppose a bank has $200,000 in deposits and a reserve ratio of 15%. Its
required reserves are
A)
$350.
B)
$1,500.
C)
$3,000.
D)
$30,000.

17)
Suppose a bank has $8 million in deposits and a reserve ratio of 20%. Its
required reserves are
A)
$40,000.
B)
$400,000.
C)
$1,600,000.
D)
$16,000,000.

18)
Suppose a bank has $200,000 in deposits, a reserve ratio of 10%, and reserves
of $45,000. This bank has excess reserves of
A)
$155,000.
B)
$25,000.
C)
$10,000.
D)
$5,000.

19)
Suppose a bank has $1 million in deposits, a reserve ratio of 25%, and reserves
of $250,000. This bank has excess reserves of
A)
$250,000.
B)
$125,000.
C)
$62,500.
D)
$0.

20)
Suppose a bank has $600,000 in deposits, a reserve ratio of 20%, and bank
reserves of $240,000. This bank can make new loans in the amount of
A)
$840,000.
B)
$360,000.
C)
$120,000.
D)
$12,000.

21)
Suppose a bank has $300,000 in deposits, a reserve ratio of 5%, and bank
reserves of $45,000. This bank can make new loans in the amount of
A)
$345,000.
B)
$45,000.
C)
$30,000.
D)
$15,000.

22)
Suppose Diego deposits $4,000 in his bank. If the reserve ratio is 10%, this
will lead to a maximum increase of ________ in checking account balances
throughout all banks.
A)
$0
B)
$4,000
C)
$10,000
D)
$40,000

23)
Suppose Ariana deposits $75,000 in her bank. If the reserve ratio is 20%, this
will lead to a maximum increase of ________ in checking account balances throughout
all banks.
A)
$15,000
B)
$375,000
C)
$750,000
D)
$1,500,000

24)
Suppose Darrell has $4,000 in currency which he deposits in his bank. If the
reserve ratio is 25%, this will lead to a maximum increase of ________ in M1
throughout all banks.
A)
$0
B)
$4,000
C)
$6,000
D)
$12,000

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