Table 29-2. An economy starts with $10,000 in currency. All of this currency is deposited into a single bank, and the bank then makes loans totaling $9,250. The T-account of the bank is shown below. 24. Reserves Loans Assets $750 9,250 Liabilities Deposits $10,000 Refer to Table 29-2. The bank's reserve ratio is a. 7.50 percent. b. 8.12 percent. C. 92.50 percent. d. 100 percent. 25. Refer to Table 29-2. If all banks in the economy have the same reserve ratio as this bank, then the value of the economy's money multiplier is a. 1.33. b. 10.00. C. 10.81. d. 13.33. 26. Refer to Table 29-2. If all banks in the economy have the same reserve ratio as this bank, then an increase in reserves of $150 for this bank has the potential to increase deposits for all banks by a. $866.67. b. $1,666.67. C. $2,000.00. d. an infinite amount.
Table 29-2. An economy starts with $10,000 in currency. All of this currency is deposited into a single bank, and the bank then makes loans totaling $9,250. The T-account of the bank is shown below. 24. Reserves Loans Assets $750 9,250 Liabilities Deposits $10,000 Refer to Table 29-2. The bank's reserve ratio is a. 7.50 percent. b. 8.12 percent. C. 92.50 percent. d. 100 percent. 25. Refer to Table 29-2. If all banks in the economy have the same reserve ratio as this bank, then the value of the economy's money multiplier is a. 1.33. b. 10.00. C. 10.81. d. 13.33. 26. Refer to Table 29-2. If all banks in the economy have the same reserve ratio as this bank, then an increase in reserves of $150 for this bank has the potential to increase deposits for all banks by a. $866.67. b. $1,666.67. C. $2,000.00. d. an infinite amount.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:Table 29-2. An economy starts with $10,000 in currency. All of this currency is deposited into a single bank, and
the bank then makes loans totaling $9,250. The T-account of the bank is shown below.
24.
Reserves
Loans
Assets
$750
9,250
Liabilities
Deposits
$10,000
Refer to Table 29-2. The bank's reserve ratio is
a.
7.50 percent.
b. 8.12 percent.
C.
92.50 percent.
d.
100 percent.
25.
Refer to Table 29-2. If all banks in the economy have the same reserve ratio as this bank, then the value of
the economy's money multiplier is
a. 1.33.
b. 10.00.
C. 10.81.
d. 13.33.
26.
Refer to Table 29-2. If all banks in the economy have the same reserve ratio as this bank, then an increase in
reserves of $150 for this bank has the potential to increase deposits for all banks by
a.
$866.67.
b. $1,666.67.
C.
$2,000.00.
d.
an infinite amount.
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