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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Question 25 Banks wish to hold no excess reserves, desired reserve ratio is the same for all Not yet answered banks and there is no currency drain. Marked out of The following T-account represents the balance sheet of ABC commercial 1.00 bank: P Flag question Assets Liabilities Deposits ? Capital Reserves 194 Loans 2781 203 How much are the deposits at bank ABC? Select one: O a. 2772.00 O b. None of the answers offered are correct c. 2384.00 O d. 3178.00 e. 2790.00
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.
2. Assume that a particular bank has excess reserves of Php800,000 and checkabledeposits of Php1,500,000. If the reserve ratio is 20%, what is the size of the bank’sactual reserves?
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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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0 Question 22 (use the Deposit Expansion Multiplier (DEM) formula) Using the Fractional Reserve banking system, if the reserve ratio is 6% and someone deposits $1,000 into his checking account, the banking system potentially can increase the money supply to O $16,750.25 O $16,666.66 $16,100 $16.230.66
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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%