If a bank uses $100 of excess reserves to make a new loan when the reserve ratio is 25 percent, what happens to the money supply in the very short term? Oa. It decreases by $100. O b. It increases by $25. O c. It decreases by $25. O d. It increases by $100. Show Transcribed Text Suppose a bank has $200,000 in deposits and $150,000 in loans. What is its reserve ratio? O a. O b. 1 percent O c. 10 percent O d. 25 percent 5 percent Show Transcribed Text O a. Which list ranks the Bank of Canada's monetary policy tools from most to least frequently used? O b. bank rate changes; open-market transactions; reserve requirement changes bank rate changes; reserve requirement changes; open-market transactions O c. open-market transactions; bank rate changes; reserve requirement changes O d. open-market transactions; reserve requirement changes; bank rate changes
If a bank uses $100 of excess reserves to make a new loan when the reserve ratio is 25 percent, what happens to the money supply in the very short term? Oa. It decreases by $100. O b. It increases by $25. O c. It decreases by $25. O d. It increases by $100. Show Transcribed Text Suppose a bank has $200,000 in deposits and $150,000 in loans. What is its reserve ratio? O a. O b. 1 percent O c. 10 percent O d. 25 percent 5 percent Show Transcribed Text O a. Which list ranks the Bank of Canada's monetary policy tools from most to least frequently used? O b. bank rate changes; open-market transactions; reserve requirement changes bank rate changes; reserve requirement changes; open-market transactions O c. open-market transactions; bank rate changes; reserve requirement changes O d. open-market transactions; reserve requirement changes; bank rate changes
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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
Transcribed Image Text:If a bank uses $100 of excess reserves to make a new
loan when the reserve ratio is 25 percent, what happens
to the money supply in the very short term?
O a. It decreases by $100.
O b. It increases by $25.
O c. It decreases by $25.
O d. It increases by $100.
Show Transcribed Text
Suppose a bank has $200,000 in deposits and $150,000
in loans. What is its reserve ratio?
O a.
1 percent
O b.
5 percent
O C.
10 percent
O d. 25 percent
Show Transcribed Text
Which list ranks the Bank of Canada's monetary policy
tools from most to least frequently used?
O a.
bank rate changes; open-market transactions;
reserve requirement changes
O b. bank rate changes; reserve requirement
changes; open-market transactions
O c. open-market transactions; bank rate changes;
reserve requirement changes
O d. open-market transactions; reserve requirement
changes; bank rate changes
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