Question :
61.Thereserverequirementis4percent,banksholdnoexcessreservesandpeopleholdnocurrency.IftheFedsells$10,000worthofbonds,whathappenstothemoneysupply?
a.itincreasesby$250,000
b.itincreasesby$20 : 1262055
61.Thereserverequirementis4percent,banksholdnoexcessreservesandpeopleholdnocurrency.IftheFedsells$10,000worthofbonds,whathappenstothemoneysupply?
a.itincreasesby$250,000
b.itincreasesby$200,000
c.itdecreasesby$200,000
d.itdecreasesby$250,000
62.Ifthereserveratiois5percent,banksdonotholdexcessreserves,andpeopledonotholdcurrency,thenwhentheFedpurchases$20millionworthofgovernmentbonds,bankreserves
a.increaseby$20millionandthemoneysupplyeventuallyincreasesby$400million.
b.decreaseby$20millionandthemoneysupplyeventuallydecreasesby$400million.
c.increaseby$20millionandthemoneysupplyeventuallyincreasesby$100million.
d.decreaseby$20millionandthemoneysupplyeventuallydecreasesby$100million.
63.Ifthereserveratiois15percent,andbanksdonotholdexcessreserves,andpeopleholdonlydepositsandnocurrency,thenwhentheFedsells$25.5millionworthofbondstothepublic,bankreserves
a.increaseby$25.5millionandthemoneysupplyeventuallyincreasesby$382.5million.
b.increaseby$25.5millionandthemoneysupplyeventuallyincreasesby$170million.
c.decreaseby$25.5millionandthemoneysupplyeventuallydecreasesby$382.5million.
d.decreaseby$25.5millionandthemoneysupplyeventuallydecreasesby$170million.
64.Thereserveratiois10percent,banksdonotholdexcessreserves,andpeopleholdonlydepositsandnocurrency.WhentheFedsells$20millionworthofbondstothepublic,bankreserves
a.increaseby$20millionandthemoneysupplyeventuallyincreasesby$20million.
b.increaseby$20millionandthemoneysupplyeventuallyincreasesby$200million.
c.decreaseby$2millionandthemoneysupplyeventuallyincreasesby$20million.
d.decreaseby$20millionandthemoneysupplyeventuallydecreasesby$200million.
65.Thebankingsystemcurrentlyhas$10billionofreserves,noneofwhichareexcess.Peopleholdonlydepositsandnocurrency,andthereserverequirementis10percent.IftheFedraisesthereserverequirementto12.5percentandatthesametimebuys$1billionworthofbonds,thenbyhowmuchdoesthemoneysupplychange?
a.Itfallsby$12billion.
b.Itfallsby$19billion.
c.Itfallsby$21billion.
d.Noneoftheaboveiscorrect.
66.Thebankingsystemcurrentlyhas$50billionofreserves,noneofwhichareexcess.Peopleholdonlydepositsandnocurrency,andthereserverequirementis10percent.IftheFedraisesthereserverequirementto12.5percentandatthesametimesells$10billionworthofbonds,thenbyhowmuchdoesthemoneysupplychange?
a.Itfallsby$20billion.
b.Itfallsby$110billion.
c.Itfallsby$180billion.
d.Noneoftheaboveiscorrect.
67.Thebankingsystemcurrentlyhas$100billionofreserves,noneofwhichareexcess.Peopleholdonlydepositsandnocurrency,andthereserverequirementis10percent.IftheFedlowersthereserverequirementto5percentandatthesametimebuys$10billionworthofbonds,thenbyhowmuchdoesthemoneysupplychange?
a.Itrisesby$200billion.
b.Itrisesby$800billion.
c.Itrisesby$1,200billion.
d.Noneoftheaboveiscorrect.
68.Thebankingsystemcurrentlyhas$200billionofreserves,noneofwhichareexcess.Peopleholdonlydepositsandnocurrency,andthereserverequirementis4percent.IftheFedraisesthereserverequirementto10percentandatthesametimebuys$50billionworthofbonds,thenbyhowmuchdoesthemoneysupplychange?
a.Itrisesby$600billion.
b.Itrisesby$125billion.
c.Itfallsby$2,500billion.
d.Noneoftheaboveiscorrect.
69.Ifthepublicdecidestoholdmorecurrencyandfewerdepositsinbanks,bankreserves
a.decreaseandthemoneysupplyeventuallydecreases.
b.decreasebutthemoneysupplydoesnotchange.
c.increaseandthemoneysupplyeventuallyincreases.
d.increasebutthemoneysupplydoesnotchange.
70.Ifthepublicdecidestoholdlesscurrencyandmoredepositsinbanks,bankreserves
a.decreaseandthemoneysupplyeventuallydecreases.
b.decreasebutthemoneysupplydoesnotchange.
c.increaseandthemoneysupplyeventuallyincreases.
d.increasebutthemoneysupplydoesnotchange.