Question :
11) A commercial bank’s reserves equal to the amount of
A) : 1227815
11) A commercial bank’s reserves are equal to the amount of
A) the bank’s deposits.
B) the bank’s government securities.
C) the bank’s loans.
D) currency in the bank’s vault plus the balance on its reserve account at a Federal Reserve Bank.
E) only the currency in its vault.
Answer: D
Topic: Banks’ reserves
Skill: Level 1: Definition
Section: Checkpoint 11.2
Status: CT
12) In 2011 banks kept reserves equal to about ________ of their assets.
A) 75 percent
B) 25 percent
C) 13 percent
D) 50 percent
E) 37 percent
Answer: C
Topic: Banks’ reserves
Skill: Level 2: Using definitions
Section: Checkpoint 11.2
Status: New
13) When a commercial bank receives a deposit, it must keep part of the deposit as cash reserves to satisfy its
A) securities and loans.
B) required reserves.
C) excess reserves.
D) interbank loans.
E) loan requirements.
Answer: B
Topic: Banks’ reserves
Skill: Level 2: Using definitions
Section: Checkpoint 11.2
Status: TPS
14) A bank has checkable deposits of $1,000,000, loans of $600,000, and government securities of $400,000. If the required reserve ratio is 5 percent, the amount of required reserves is
A) $100,000.
B) $30,000.
C) $50,000.
D) $80,000.
E) $20,000.
Answer: C
Topic: Required reserve ratio
Skill: Level 2: Using definitions
Section: Checkpoint 11.2
Status: CD new
15) A bank has $250 in checking deposits, $1,000 in savings deposits, $1,200 in time deposits, $1,000 in loans to businesses, $400 in outstanding credit card balances, $800 in government securities, $25 in currency in its vault, and $25 in deposits at the Fed. Of these, ________ are part of M2.
A) $3,450
B) $2,450
C) $2,850
D) $2,200
E) $2,600
Answer: B
Topic: Banks’ deposits
Skill: Level 3: Using models
Section: Checkpoint 11.2
Status: CD new
16) A bank has $250 in checking deposits, $1,000 in savings deposits, $1,200 in time deposits, $1,000 in loans to businesses, $400 in outstanding credit card balances, $800 in government securities, $25 in currency in its vault, and $25 in deposits at the Fed.The bank’s reserves are equal to
A) $25.
B) $275.
C) $2,225
D) $50.
E) $350.
Answer: D
Topic: Banks’ reserves
Skill: Level 3: Using models
Section: Checkpoint 11.2
Status: CD new
17) The above table gives assets and deposits for a (small) bank. The bank’s deposits that are part of M1 are equal to
A) $1,600.
B) $600.
C) $3,100.
D) $3,130.
E) $30.
Answer: B
Topic: Banks’ deposits
Skill: Level 3: Using models
Section: Checkpoint 11.2
Status: CD new
18) The above table gives assets and deposits for a (small) bank. The bank’s deposits that are part of M2 are equal to
A) $600.
B) $1600.
C) $3,100.
D) $30.
E) $5,100.
Answer: C
Topic: Banks’ deposits
Skill: Level 3: Using models
Section: Checkpoint 11.2
Status: CD new
19) The above table gives assets and deposits for a (small) bank. The bank’s reserves are equal to
A) $20.
B) $30.
C) $600.
D) $630.
E) $620.
Answer: B
Topic: Banks’ reserves
Skill: Level 3: Using models
Section: Checkpoint 11.2
Status: CD new
20) Cisco is considering opening a financial institution that accepts savings deposits from only its employees and makes loans to only its employees. The best description of this financial institution is that it is a
A) credit union.
B) commercial bank.
C) savings and loan association.
D) savings bank.
E) federal government chartered credit bank.
Answer: A
Topic: Credit union
Skill: Level 2: Using definitions
Section: Checkpoint 11.2
Status: CT
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