Which of the following actions by the Bank of Canada will result in an immediate increase of approximately $600 million in excess reserves for banks? (Assume a target reserve ratio of 30%.) OA. Transfer $600 million out of commercial bank deposits into its own accounts. OB. Purchase $857 million of government securities from the non-bank public, because of the 30% target reserve ratio OC. Purchase $600 million of government securities from the non-bank public OD. Purchase less than $600 million of government securities from the non-bank public OE. Sell $857 million of government securities to banks, because of the 30% target reserve ratio OF. Sell $600 million of government securities to banks OG. Sell less than $600 million of government securities to banks

Which of the following actions by the Bank of Canada will result in an immediate increase of approximately $600 million in excess reserves for banks? (Assume a target reserve ratio of 30%.) OA. Transfer $600 million out of commercial bank deposits into its own accounts. OB. Purchase $857 million of government securities from the non-bank public, because of the 30% target reserve ratio OC. Purchase $600 million of government securities from the non-bank public OD. Purchase less than $600 million of government securities from the non-bank public OE. Sell $857 million of government securities to banks, because of the 30% target reserve ratio OF. Sell $600 million of government securities to banks OG. Sell less than $600 million of government securities to banks

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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XYZ Corporation is trying to decide whether it should buy money market instruments or leave its funds on deposit at a commercial bank. Which of the following is an advantage of buying money market instruments over leaving funds on deposit at a commercial bank that XYZ should be aware of? a. Money market instruments offer a higher yield than leaving funds on deposit at a commercial bank. b. Money market instruments are more liquid than funds on deposit at a commercial bank. c. Money market instruments are safer than leaving funds on deposit at a commercial bank. d. Money market instruments involve a financial middleman.
Refer to the accompanying consolidated balance sheet for the commercial banking system. Assume the required reserve ratio is 12 percent. All figures are in billions of dollars. The maximum amount by which the commercial banking system can expand the supply of money by lending is Multiple Choice a. $250 billion. b. $600 billion. c. $450 billion. d. $350 billion.
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Refer to Table A. The Fed would have to increase the reserve requirement to what percentage for this bank to have no excess reserves? A) 20% B) 18.6% C) 12.1% D) 16.67%
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Reserves, Deposits and the Money Multiplier If the money multiplier is 25, then the required reserve ratio (RR) is ________. (Round to the nearest tenth when appropriate.) Select one: A. 1.3% B. 4% C. 12.5% D. 25%
If the required reserve ratio were 10%, how much of this bank's reserves would qualify as excess reserves? A) 200,000 B) 300,000 C) 400,000 D) 550,000 E) 3,000,000
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John is writing a research paper and needs to know what determines the value of a bank's loans. By law, banks are permitted to lend: O their deposits O all of their reserves O their required reserves O their excess reserves « Previoùs Next » W ASUS 16 18 5 8 R
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