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
