Macro Exam Chap 14-15 Quiz

Other things equal, if the required reserve ratio was lowered:

What is one significant characteristic of fractional reserve banking?

A commercial bank has actual reserves of $50,000 and checkable deposits of $200,000 and the required reserve ratio is 20%. The excess reserves of the bank are:

When a check is cleared against a bank, it will lose:

Assume that Johnson deposits $350 of currency in his account in the XYZ bank. Later the same day Swanson negotiates a loan for $2,000 at the same bank. In what direction and by what amounts has the supply of money changed?

Assume that the legally required reserve is 15 percent and commercial banks choose to hold additional excess reserves equal to 5 percent of any newly acquired deposits. Under these circumstances the monetary multiplier for the commercial banking system is:

A commercial bank has checkable deposit liabilities of $400,000, reserves of $150,000, and a required reserve ratio of 25%. The amount by which a single commercial bank and the amount by which the banking system can increase loans are, respectively: