# 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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