**Questions on Reserve Ratio and Deposit Multiplier**7. If the reserve ratio is 10%, the deposit multiplier is _______. (Type your answer here)8. If the reserve ratio is 10% and the banking system has excess reserves of $50, the maximum amount of new deposits that can be created through lending is $_______. (Type your answer here)9. If the reserve ratio is 20%, the deposit multiplier is _______. (Type your answer here)**Explanation:**- **Reserve Ratio**: This is the fraction of customer deposits that banks are required to keep as reserves. It is set by the central bank.- **Deposit Multiplier**: This is a formula used to determine the maximum amount of deposits that can be created for a given amount of reserves in the banking system. It is calculated as the reciprocal of the reserve ratio (1/reserve ratio).

The deposit multiplier also known as the deposit multiplier ratio refers to an inverse of the…

7. If the reserve ratio is 10%, the deposit multiplier is 8. If the reserve ratio is 10% and the banking systems has excess reserves of $50, the Type your answer here maximum amount of new deposits that can be created through lending is $ Type your answer here 9. If the reserve ratio is 20%, the deposit multiplier is Type your answer here

7. If the reserve ratio is 10%, the deposit multiplier is 8. If the reserve ratio is 10% and the banking systems has excess reserves of $50, the Type your answer here maximum amount of new deposits that can be created through lending is $ Type your answer here 9. If the reserve ratio is 20%, the deposit multiplier is Type your answer here

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Big bucks bank Assets Liabilities Total reserves $30mm demand deposits $190mm Loans $100mm Bonds $100mm Stockholder equity $40 mm Suppose the required reserve ratio is 10%. What is the maximum amount of money Big buck bank can create? If the reserve ratio is increased to 14%, what is the maximum amount of money BBB can create? 3 If the reserve ratio is still at 10% and BBB chose to buy bonds instead of making loans with its excess reserves, what is the maximum amount of money BBB can create? a) From question #1 & #3, if the prospective Loans and Bonds both paid interest of 6.8%, which strategy would be more profitable for BBB? b) If BBB decided to pursue #1 as a strategy, what is the maximum money making potential of the banking…
QUESTION 7 The size of the effect of a given deposit of cash into a demand deposit account on the money supply is smaller: the smaller the fraction of money people want to hold as currency and the smaller the fraction of deposits banks want to hold as excess reserves. a. b. the greater the fraction of money people want to hold as currency and the greater the fraction of deposits banks want to hold as excess reserves. C. the smaller the fraction of money people want to hold as currency and the greater the fraction of deposits banks want to hold as excess reserves. the greater the fraction of money people want to hold as currency and the smaller the fraction of deposits banks d. want to hold as excess reserves.
Below is the balance sheet for a bank. Under "Other" it has listed "$X" just think of this as the dollar amount needed to make the balance sheet balance. It is not important what that value is for this question. AssetsLiabilitiesReserves 42Deposits 245Loans 160 Securities 48Other $X Using the balance sheet above, find the level of required reserves for this bank if the required reserve ratio = 8%(Give answers to 2 decimal places as needed)
Which statement about banks and risk is not correct? Select one: a. Banks face liquidity risks from lending activities. This is because the bank's assets are tied up in short- term loans whilst bank liabilities are longer-term b. Banks face credit risks from lending activities. To reduce this risk, banks require that potential borrowers put up some of their own funds or assets to serve as collateral C. Banks create bank money through their lending activities. The amount of bank money in an economy exceeds the amount of base money issued by the central bank creating liquidity risk for the bank
Suppose the reserve requirement is set at 20 percent and excess reserves are $27 million. What is the money multiplier? Multiple Choice 0.05 5.40 5.00 135.00
Please answer everything in the photos. Bottom question is asking which option below is the overall increase. $750,000 $6,000,000 or $7,500,000.
Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 20%. Hint: If the change is negative, be sure to enter the value as negative number. Amount Deposited Change in Excess Reserves Change in Required Reserves (Dollars) (Dollars) (Dollars) 750,000 Now, suppose First Main Street Bank loans out all of its new excess reserves to Kate, who immediately uses the funds to write a check to Hubert. Hubert deposits the funds immediately into his checking account at Second Republic Bank. Then Second Republic Bank lends out all of its new excess reserves to Shen, who writes a check to Poornima, who deposits the money into her account at Third Fidelity Bank. Third Fidelity lends out all of its new excess reserves to Valerie in turn. Fill in the following table to show the effect of this ongoing chain of events at each bank. Enter each answer to the nearest dollar. Increase in Deposits Increase in Required Reserves…
24. Assuming the required reserve ratio is 10%, how much can this bank lend? a) $200,000 b) $300,000 c) $400,000 d) $550,000 e) $3,000,000
Suppose a bank has a total deposit of $748 million. If the bank’s required reserves equal $253 million, total loans equal $368 million, then the bank has excess reserves of: Group of answer choices $109 million. $115 million. $127 million. $380 million. $495 million.
I'd like help on b,c,d
1. If the reserve ratio is 10%, a bank with $1,000 in deposits has required reserves of $ Type your answer here 2. If a bank is holding required reserves of $100 to support $500 in deposits, the reserve ratio is Type your answer here 3. If a bank with $500 in deposits is holding reserves of $50 when the reserve ratio is 10%, the bank has excess reserves of $ %. Type your answer here
help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working