MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
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Question
Chapter 15, Problem 11SQ
To determine
The cost to banks for borrowing from FED.
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When a commercial bank borrows from the Fed,
a.
it must be because the bank is not meeting its reserve requirements.
b.
the money supply falls.
c.
the bank can make more loans.
d.
the reserves of the bank fall.
Last Bank of Panorama Springs
Assets:
Liabilities:
Reserves
$25.00
Deposits
$175.00
Loans
$150.00
If the reserve requirement is 12 percent, what is the state of this bank?
a. It has excess reserves of more than $5000.
b. It has excess reserves of less than $5000.
c. It has less reserves than required.
d. It can make a new loan of $17,500.
The federal funds rate
A. equals the discount rate.
B. only matters to banks and has very little impact on individual consumers.
C. is set by the Federal Reserve Bank.
D. is the rate that banks charge each other for short-term loans of excess reserves.
Chapter 15 Solutions
MACROECONOMICS FOR TODAY
Ch. 15.3 - Prob. 1YTECh. 15 - Prob. 1SQPCh. 15 - Prob. 2SQPCh. 15 - Prob. 3SQPCh. 15 - Prob. 4SQPCh. 15 - Prob. 5SQPCh. 15 - Prob. 6SQPCh. 15 - Prob. 7SQPCh. 15 - Prob. 8SQPCh. 15 - Prob. 9SQP
Ch. 15 - Prob. 10SQPCh. 15 - Prob. 11SQPCh. 15 - Prob. 1SQCh. 15 - Prob. 2SQCh. 15 - Prob. 3SQCh. 15 - Prob. 4SQCh. 15 - Prob. 5SQCh. 15 - Prob. 6SQCh. 15 - Prob. 7SQCh. 15 - Prob. 8SQCh. 15 - Prob. 9SQCh. 15 - Prob. 10SQCh. 15 - Prob. 11SQCh. 15 - Prob. 12SQCh. 15 - Prob. 13SQCh. 15 - Prob. 14SQCh. 15 - Prob. 15SQCh. 15 - Prob. 16SQCh. 15 - Prob. 17SQCh. 15 - Prob. 18SQCh. 15 - Prob. 19SQCh. 15 - Prob. 20SQ
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Similar questions
- How to figure out the banks' excess reserves.arrow_forwardIn a system of 100-percent-reserve banking, a. banks do not accept deposits. b. banks do not influence the supply of money. c. loans are the only asset item for banks. d. banks can increase the money supply.arrow_forwardThe government regulates the banking industry by a. limiting the quantity of some kinds of assets that a bank may own. b. conducting frequent audits and examinations. c. limiting the kinds of assets that a bank may own. d. All of these responses are correct.arrow_forward
- The government of a small country imposes a minimum reserve ratio of 7%. If a bank within this country receives a deposit of $130,000, then: Select one: a. $9,100 should be lent out to customers and $120,900 should be held by the bank b. $120,900 should be lent out to customers and $9,100 should be held by the bank c. None of the answers are correct d. $130,000 should be fully lent to customers at 7% $130,000 should be fully lent to customers at 7% $130,000 should be fully lent to customers at 7% e. $130,000 should be held by the bankarrow_forwardWhat a bank owes to someone else is considered part of the bank’s ________. Select one: a. liabilities b. assets c. net worth d. excess reservesarrow_forward11. _______________ is responsible for serving individual and business organizations in terms of mobilizing funds. a. International monetary fund b. Financial system c. None of the options d. Global money exchangesarrow_forward
- What happens in a fractional reserve banking system? A. Bank panics cannot occur b. The monetary system just be backed by good c. Banks can create money through the lending process d. The federal reserve has no control over the amount of money in circulationarrow_forwardBank managers lend the excess reserves created when new deposits come in because they want to a. create new money in the economy. b. earn a profit. c. deplete required reserves. d. deplete desired reserves.arrow_forwardEconomics The process of bundling loans together and buying and selling these bundles in a secondary financial market is called Select one: a. open market operations. b. fractional reserve lending. C. seigniorage. d. securitization.arrow_forward
- How does the Central Bank spend it's profit?arrow_forwardWhich of the following is true about banks? Select one: a. The interest rate banks charge when they lend is the same they pay for the deposits they receive. b. Banks are financial institutions through which savers can directly provide funds to borrowers. c. Typically, banks receive few but big deposits, which they then use to make many small loans. d. Through the checking accounts they facilitate, banks provide a medium of exchange.arrow_forward1. Which of these is a basic goal of the Federal Reserve System? a. export promotion b. zero interest rates c. a balanced federal budget d. full employmentarrow_forward
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