Dollar Bank is currently loaned up. If the required reserve ratio is lowered, Group of answer choices Dollar Bank will still be loaned up because it did not receive any additional deposits. Dollar Bank's actual reserves will increase, but it will still be loaned up. Dollar Bank's net worth will increase. Dollar Bank will have excess reserves that it can lend out.

Dollar Bank is currently loaned up. If the required reserve ratio is lowered, Group of answer choices Dollar Bank will still be loaned up because it did not receive any additional deposits. Dollar Bank's actual reserves will increase, but it will still be loaned up. Dollar Bank's net worth will increase. Dollar Bank will have excess reserves that it can lend out.

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter19: Money Creation

Section: Chapter Questions

Problem 19SQ

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A bank has outstanding loans of $7,500, reserves of $2,500, and deposit liabilities of $10,000. If the required reserve ratio is 10%, this bank: A. Is holding excess reserves of $1,000 B. Is in a position to make a new loan for $1,500 C. Is in a position to make a new loan for $2,500 D. Has less reserves than required
When a bank issues a loan to a customer: A) bank assets fall by the amount of the loan. B) the composition of bank assets changes so that bank reserves increase and the value of bank loans decreases. C) bank assets rise by the amount of the loan. D) the composition of bank assets changes so that bank reserves decrease and the value of bank loans increases.
Question 26 A commercial bank has excess reserves of $10,000 and a required reserve ratio of 20%. It grants a loan of $8,000 to a customer, who then writes out a check for $8,000 that is deposited in another bank. The first bak will find its reserves decrease by: $3,000 $2,000 $1,600 $8,000 Next Page Page 26 of 35
Your bank has the following balance sheet: Assets Liabilites Reserves $50 million Checkable Deposits $200 million Securites $50 million Bank Capital $50 million Loans $150 million If the required reserve ratio is 10%, what possible actions can the bank manager take if there is an unexpected deposit outflow of $50 million?
Required reserves with a bank equal A) Total reserves plus excess reserves B) Excess reserves minus demand deposits C) Total reserves minues excess reserves D) Demand deposits plus savings account
Bank of Sin City has $250 million in deposits. Bank of Sin City is meeting its reserve requirement and has no excess reserves. It has $10 million in reserves. Bank of Sin City faces a required reserve ratio ofa) 1.25%.b) 4%.c) 20%.d) 37.5%.
Distinguish between legally required reserves and excess reserves.
Excess reserves are Multiple Choice O Required reserves less demand deposits, Total reserves less transactions account balances. Bank reserves in excess of vault cash, Total reserves less required reserves.
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First National Bank Assets Liabilities and Net Worth US Treasury Bonds $450,000 Net Worth $500,000 Reserves (Cash) $175,000 Checkable Deposits $250,000 Loans $125,000 Second National Bank Assets Liabilities and Net Worth US Treasury Bonds $100,000 Net Worth $250,000 Reserves (Cash) $250,000 Checkable Deposits $100,000 Third National Bank Assets Liabilities and Net Worth US Treasury Bonds $900,000 Net Worth $1,000,000 Reserves (Cash) $350,000 Checkable Deposits $500,000 Loans $250,000The Required Reserve Ratio is 25% for all banks. Assuming that all the customers that have outstanding loans have used all of those additional funds to invest in new machinery for their businesses (therefore, the amount of Checkable Deposits is the true liability the bank has to its customers), then $_____________ is the resulting change to the loan creating potential of the whole system (these three banks) as a result of Second National Bank customers depositing an additional $400,000 in their Checkable…
Bank deposit creation is limited by reserve requirements. True or False
if a bank has required reserves of $45,000,000, excess reserves of $12,000,000, and deposits of $90,000,000 with a required reserve ratio of 50%, how much can the bank lend out?