Assume the commercial banking system has checkable deposits of $20 billion and excess reserves of $2 billion at a time when the reserve ratio is 25 percent. If the reserve ratio is lowered to 20 percent, we can conclude that the: Answers: bank now has excess reserves of $3.2 billion.   bank now has neither an excess nor a deficiency of reserves.   maximum money-creating potential of the banking system has been increased by $7 billion.   Board of Governors has decided that the economy is experiencing a high rate of inflation.

10. Banks in the country of Mistania have a total of $17000 in required reserves and $276000 in checkable deposits. Calculate Mistania's required reserve ratio:

10. If the reserve ratio is 20% and the banking system has excess reserves of $50, the maximum amount of new deposits that can be created through lending is $ Type your answer here

7. The money creation process Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 10%. Hubert, a client of First Main Street Bank, deposits $500,000 into his checking account at First Main Street Bank. Complete the following table to reflect any changes in First Main Street Bank's T-account (before the bank makes any new loans). Assets Liabilities                       Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 10%. Hint: If the change is negative, be sure to enter the value as negative number. Amount Deposited Change in Excess Reserves Change in Required Reserves (Dollars) (Dollars) (Dollars) 500,000         Now, suppose First Main Street Bank loans out all of its new excess reserves to Eileen, who immediately uses the funds to write a check to Clancy. Clancy…

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8. A bank's "required reserves" are: none of the answers given is correct held as deposits with the Federal Reserve System equal to its transactions deposits equal to its checkable deposits

#13  Help me on part e

In a fractional-reserve banking system, such as we have in the United States, banks create money. 1. How does a fractional-reserve banking system create money? 2. How is this process affected when banks hold excess reserves or depositors hold extra cash?

But which event will increase the quantity of deposits the banking system can create? A. An increase in the monetary base B. An increase in the currency drain C. An increase in the desired reserves by banks

Are near money's highly liquid financial assets or many financial asset?