Question : 91) Suppose that the excess reserves in Toronto Dominion Bank : 1384448

 

91) Suppose that the excess reserves in Toronto Dominion Bank increase by $700. Given a desired reserve ratio of 2.5% and no cash drain, the maximum change in deposits for the entire banking system would be

A) $682.50.

B) $700.00.

C) $17 500.00.

D) $28 000.00.

E) $70 000.00.

92) Suppose that the excess reserves in Toronto Dominion Bank increase by $700. Given a target reserve ratio of 1.0% and no cash drain, the maximum change in deposits for the entire banking system would be

A) $682.50.

B) $700.00.

C) $17 500.00.

D) $28 000.00.

E) $70 000.00.

93) A desire by ________ has no effect on the ability of the banking system to create bank deposits, for a given amount of reserves in the banking system.

A) banks to delay making loans in expectation of higher future interest rates

B) households to increase the fraction of their money held in the form of currency

C) households to hold more money in safety-deposit boxes

D) the government to increase its level of spending

E) firms to reduce their desired level of borrowing from banks

94) Refer to Table 27-5. Assume that Northern Bank’s target reserve ratio is 10%. What is it’s actual reserve ratio?

A) 6.67%

B) 7.1%

C) 8.0%

D) 9.1%

E) 10.0%

95) Refer to Table 27-5. Northern Bank extends credit to its customers in the form of household mortgages and lines of credit. Under which category of the balance sheet do these fall?

A) Reserves

B) Loans

C) Liabilities

D) Deposits

E) Capital

96) Refer to Table 27-5. Owners of Northern Bank contributed money to start the bank. Under which category of it’s balance sheet do these funds fall?

A) Reserves

B) Loans

C) Assets

D) Deposits

E) Capital

97) Refer to Table 27-5. Assume that Northern Bank’s target reserve ratio is 10%. What is its current level of excess reserves?

A) -$320

B) -$200

C) $0

D) $320

E) $400

98) Refer to Table 27-5. Assume that Northern Bank’s target reserve ratio is 10%. In order to achieve its target reserve ratio, Northern Bank must ________ and ________.

A) increase its reserves by $200; decrease its deposits by $200

B) increase its reserves by $400; decrease its deposits by $400

C) not change its reserves; not change its deposits

D) increase its reserves by $200; decrease its loans by $200

E) increase its reserves by $400; increase its loans by $800

99) Refer to Table 27-5. Northern Bank holds cash in its vault and has some deposits in its account at the central bank. Under which category on its balance sheet are these funds included?

A) reserves

B) loans

C) liabilities

D) deposits

E) capital

100) Consider a new deposit of $10 000 to the Canadian banking system. The commercial bank that initially receives this deposit will find itself with

A) no excess reserves if there is no reserve requirement.

B) $1000 of excess cash reserves if its target reserve ratio is 10%.

C) $2000 of excess cash reserves if its target reserve ratio is 2%.

D) $9000 of excess cash reserves if its target reserve ratio is 10%.

E) $98 000 of excess cash reserves if its target reserve ratio is 2%.

 

 

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