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If reserves in the Bank of Canada increase by $100, then chequable deposits will increase by
$400 in the simple model of deposit creation when the desired reserve ratio is ____.
A) 0.01
B) 0.10
C) 0.20
D) 0.25
Answer: D
Diff: 1 Type: MC Page Ref: 388
Skill: Applied
Objective List: 16.4 Utilize a simple model of multiple deposit creation, showing how the
central bank can control the level of deposits by setting the level of reserves
If reserves in the banking system increase by $100, then chequable deposits will increase by
$667 in the simple model of deposit creation when the desired reserve ratio is
A) 0.01
B) 0.05
C) 0.15
D) 0.20
Answer: C
Diff: 1 Type: MC Page Ref: 388
Skill: Applied
Objective List: 16.4 Utilize a simple model of multiple deposit creation, showing how the
central bank can control the level of deposits by setting the level of reserves
If reserves in the banking system increase by $100, then chequable deposits will increase by
$100 in the simple model of deposit creation when the desired reserve ratio is ____.
A) 0.01
B) 0.10
C) 0.20
D) 1.0 0
Answer: D
Diff: 1 Type: MC Page Ref: 388
Skill: Applied
Objective List: 16.4 Utilize a simple model of multiple deposit creation, showing how the
central bank can control the level of deposits by setting the level of reserves
If reserves in the banking system increase by $100, then chequable deposits will increase by
$2,000 in the simple model of deposit creation when the desired reserve ratio is ____.
A) 0.01
B) 0.05
C) 0.10
D) 0.20
Answer: B
Diff: 1 Type: MC Page Ref: 388
Skill: Applied
Objective List: 16.4 Utilize a simple model of multiple deposit creation, showing how the
central bank can control the level of deposits by setting the level of reserves