Question : 21) When Grayce deposits $4,000 cash in her checkable deposit : 1227825

 

 

21) When Grayce deposits $4,000 cash in her checkable deposit at the Beach Bank and the Beach Bank’s excess reserves increase by $3,600, the desired reserve ratio is

A) 5 percent.

B) 10 percent.

C) 15 percent.

D) 90 percent.

E) $400.

Answer:  B

Topic:  Excess reserves

Skill:  Level 3: Using models

Section:  Checkpoint 11.4

Status:  CD new

22) If Bulge Bank has a desired reserve ratio of 10 percent, loans of $25,000, deposits of $100,000, vault cash of $10,000, and reserves at the Fed of $65,000, then the bank

A) has no remaining capacity to make loans.

B) does not have enough reserves to meet its requirement.

C) has excess reserves of $65,000.

D) has excess reserves of $55,000.

E) has excess reserves of $75,000.

Answer:  C

Topic:  Excess reserves

Skill:  Level 3: Using models

Section:  Checkpoint 11.4

Status:  WM

 

23) The Commerce Bank of Beverly Hills has total deposits of $1,000,000 and total reserves of $220,000. The desired reserve ratio is 10 percent. The bank’s excess reserves are

A) $22,000.

B) $120,000.

C) $100,000.

D) $80,000.

E) $1,000,000.

Answer:  B

Topic:  Excess reserves

Skill:  Level 3: Using models

Section:  Checkpoint 11.4

Status:  CD new

 

24) A bank has deposits of $400, reserves of $50, and the desired reserve ratio is 7 percent. The bank’s excess reserves are

A) $0.

B) $22.

C) $28.

D) $3.50

E) $50.

Answer:  B

Topic:  Excess reserves

Skill:  Level 2: Using definitions

Section:  Checkpoint 11.4

Status:  CD new

25) Suppose the desired reserve ratio is 10 percent. If the Commerce Bank has total deposits of $20,000, total assets of $10,000, and actual reserves of $8000, the amount of excess reserves is

A) $2,000.

B) $6,000.

C) $800.

D) $100.

E) $0.

Answer:  B

Topic:  Excess reserves

Skill:  Level 2: Using definitions

Section:  Checkpoint 11.4

Status:  CD new

 

26) A bank has deposits of $100,000, reserves of $20,000, and loans of $80,000. If the desired reserve ratio is 10 percent, then its excess reserves are

A) 0.

B) $8,000.

C) $10,000.

D) $2,000.

E) $12,000.

Answer:  C

Topic:  Excess reserves

Skill:  Level 2: Using definitions

Section:  Checkpoint 11.4

Status:  NAU

 

27) The required reserve ratio is 20 percent and banks have no excess reserves. Katie deposits $300 in her bank. What are the bank’s excess reserves immediately after Katie makes her deposit?

A) $30

B) $90

C) $240

D) $60

E) $300

Answer:  C

Topic:  Excess reserves

Skill:  Level 3: Using models

Section:  Checkpoint 11.4

Status:  AA

28) If Jose deposits $2,000 in his bank and the desired reserve ratio is 10 percent, what is the amount of new loans that the bank can make?

A) $2,000

B) $200

C) $1,800

D) $1,900

E) $2,200

Answer:  C

Topic:  Excess reserves

Skill:  Level 2: Using definitions

Section:  Checkpoint 11.4

Status:  NAU

 

29) Suppose a bank has $1,000 in deposits and $100 in reserves. If the desired reserve ratio is 5 percent, how much can this bank increase its loans?

A) $0

B) $400

C) $80

D) $50

E) $100

Answer:  D

Topic:  Excess reserves

Skill:  Level 2: Using definitions

Section:  Checkpoint 11.4

Status:  NAU

 

30) The desired reserve ratio is 10 percent and banks have no excess reserves. Juliet deposits $300 in her bank. What is the maximum that Juliet’s bank can now loan?

A) $3,000

B) $270

C) $30

D) $330

E) $300

Answer:  B

Topic:  Money creation process

Skill:  Level 3: Using models

Section:  Checkpoint 11.4

Status:  CD new