Economics Chap 12-16 study
test with best answers
2024\2025
Suppose that a bank has accepted $20,000 in checking deposits,
$40,000 in savings deposits, has $10,000 in cash reserves, and made
$50,000 in loans. What is the bank's reserve ratio? - Answer 16.6%
If the reserve requirement is 10%, what is the money multiplier? -
Answer 10
Which of the following is an example of the Fed making monetary
policy? - Answer Decreasing the discount rate to 2%
If the economy has just experienced a severe recession, which type of
Fed policymaker would be more focused on a quick recovery? - Answer
Doves
Suppose that the central bank increases interest rates in an economy.
How would this affect aggregate demand and inflation? - Answer
Aggregate demand would fall and inflation would fall.
,Economics Chap 12-16 study
test with best answers
2024\2025
Chaletland should _____ interest rates during a recession and _____
interest rates during an economic boom in order to maintain long-run
equilibrium. - Answer decrease; increase
Select the statement that best defines required reserves. - Answer The
amount banks are required by law to hold on each deposit.
You have just begun a new job as a bank teller at Santa's Elf Bank. Your
supervisor asks you what the difference is between reserves and excess
reserves in terms of banking. You want to impress your supervisor, so
you recall what you learned in your economics course in order to form
your response.
What is the difference between reserves and excess reserves in terms
of banking? - Answer Reserves refer to the cash banks have on hand to
satisfy the Federal Reserve requirements. Excess reserves refer to the
amount of reserves that banks have in excess of the legally required
reserves.
,Economics Chap 12-16 study
test with best answers
2024\2025
Phil Frugal has been saving his pennies since he was 5 years old. He is
now 45 and deposits his savings in a bank. His pennies total $5,000.
Using this information and your knowledge of the banking system,
select the best match for each item. Then calculate the values of
reserves, required reserves, and excess reserves. Assume a required
reserve ratio of 10%.
a. The amount of interest the bank must charge on a loan
b. The amount of funds banks must, by law, hold in reserve
c. The amount a bank has on hand to fulfill the cash demands of its
customers and the reserve requirements of the Fed
d. The amount of reserves the bank owes to other banks
e. The maximum amount of reserves available for loans
f. The amount of reserves the bank must set aside to loan to member
banks
Enter the values of reserves, excess reserves, and required reserves. -
Answer a. none of these
, Economics Chap 12-16 study
test with best answers
2024\2025
b. required reserves
c. reserves
d. none of these
e. excess reserves
f. none of these
Reserves: $5000
Excess reserves: $4500
Required reserves: $500
Identify each statement as either true or false.
In the United States, banks keep the entire value of all customer
deposits in the bank vault to meet customer withdrawals.
Banks typically loan out a portion of customer deposits.
test with best answers
2024\2025
Suppose that a bank has accepted $20,000 in checking deposits,
$40,000 in savings deposits, has $10,000 in cash reserves, and made
$50,000 in loans. What is the bank's reserve ratio? - Answer 16.6%
If the reserve requirement is 10%, what is the money multiplier? -
Answer 10
Which of the following is an example of the Fed making monetary
policy? - Answer Decreasing the discount rate to 2%
If the economy has just experienced a severe recession, which type of
Fed policymaker would be more focused on a quick recovery? - Answer
Doves
Suppose that the central bank increases interest rates in an economy.
How would this affect aggregate demand and inflation? - Answer
Aggregate demand would fall and inflation would fall.
,Economics Chap 12-16 study
test with best answers
2024\2025
Chaletland should _____ interest rates during a recession and _____
interest rates during an economic boom in order to maintain long-run
equilibrium. - Answer decrease; increase
Select the statement that best defines required reserves. - Answer The
amount banks are required by law to hold on each deposit.
You have just begun a new job as a bank teller at Santa's Elf Bank. Your
supervisor asks you what the difference is between reserves and excess
reserves in terms of banking. You want to impress your supervisor, so
you recall what you learned in your economics course in order to form
your response.
What is the difference between reserves and excess reserves in terms
of banking? - Answer Reserves refer to the cash banks have on hand to
satisfy the Federal Reserve requirements. Excess reserves refer to the
amount of reserves that banks have in excess of the legally required
reserves.
,Economics Chap 12-16 study
test with best answers
2024\2025
Phil Frugal has been saving his pennies since he was 5 years old. He is
now 45 and deposits his savings in a bank. His pennies total $5,000.
Using this information and your knowledge of the banking system,
select the best match for each item. Then calculate the values of
reserves, required reserves, and excess reserves. Assume a required
reserve ratio of 10%.
a. The amount of interest the bank must charge on a loan
b. The amount of funds banks must, by law, hold in reserve
c. The amount a bank has on hand to fulfill the cash demands of its
customers and the reserve requirements of the Fed
d. The amount of reserves the bank owes to other banks
e. The maximum amount of reserves available for loans
f. The amount of reserves the bank must set aside to loan to member
banks
Enter the values of reserves, excess reserves, and required reserves. -
Answer a. none of these
, Economics Chap 12-16 study
test with best answers
2024\2025
b. required reserves
c. reserves
d. none of these
e. excess reserves
f. none of these
Reserves: $5000
Excess reserves: $4500
Required reserves: $500
Identify each statement as either true or false.
In the United States, banks keep the entire value of all customer
deposits in the bank vault to meet customer withdrawals.
Banks typically loan out a portion of customer deposits.
