When the central bank lowers the required reserve ratio, the banks' ability to make loansand the money supplySelect one:a. increase; increasesO b. increase; remain constantО с.remain constant; decreasesO d. decrease; decreasesNext paE pagee to search

Required Reserve ratio is the ratio which is determined by central bank for the commercial bank in…

When the central bank lowers the required reserve ratio, the banks' ability to make loans and the money supply Select one: O a. increase; increases O b. increase; remain constant O c. remain constant; decreases O d. decrease; decreases

When the central bank lowers the required reserve ratio, the banks' ability to make loans and the money supply Select one: O a. increase; increases O b. increase; remain constant O c. remain constant; decreases O d. decrease; decreases

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter15: The Debate Over Monetary And Fiscal Policy

Section: Chapter Questions

Problem 4TY

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When the central bank lowers the required reserve ratio, the banks' ability to make loans
and the money supply
Select one:
a. increase; increases
O b. increase; remain constant
О с.
remain constant; decreases
O d. decrease; decreases
Next pa
E page
e to search

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Suppose that the reserve requirement for checkingdeposits is 10 percent and that banks do not hold anyexcess reserves.a. If the Fed sells $1 million of government bonds,what is the effect on the economy’s reserves andmoney supply?b. Now suppose that the Fed lowers the reserverequirement to 5 percent but that banks chooseto hold another 5 percent of deposits as excessreserves. Why might banks do so? What is theoverall change in the money multiplier and themoney supply as a result of these actions?
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Reduction of interest rates in bank will reduce the consumption. a. False O b. True
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Which of the following about saving deposits a-under M2 supply, they they are bank accounts that you cannot white a check from directly. generally moneyl to be kept asided. you can easily withdraw money cash from these aacounts at an automatic teller machine or back d- included in M1 money supply these are the monies held in checking accounts. they are called demand deposits or chekable deposits because the bank must give the deposit holder his money on demand when a check is written or a debit card is used c- included in M1 money supply therefore, very lliquid these are coins and bills that vcirvulate in an economy that are NOT held by the US treasury Federal reserve bank, or in any bank vaults so the cash you havae in your wallet pocket right now d- under M2 money sypplly funds that you invest in where the deposits of many investors are pooled together and invested in a safe way such as short term goverment bods.
Coursc asibdala Table 1 First Charter Bank Assets Liabilities $800 $400 $1.200 Reserves Loans Total Deposits Net Worth Total Refer to Table 1. The required reserve ratio is 25%. If the First Charter Bank is meeting its reserve requirement and has no excess reserves, its reserves equal Lütfen birini seçin: O A. $300 O B. $600 O C. SO O D. $100 O E. $200 The Italian economy can be characterized by Equation 24.1.
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