the economics of money, banking, and financial markets

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39. 
    

    If a bank has excess reserves of $7,000 and demand deposit liabilities of $100,000, and if the
    reserve requirement is 10 percent, then the bank has actual reserves of ____.
    A) $14,000
    B) $17,000
    C) $22,000
    D) $27,000
    Answer: B
    Diff: 2 Type: MC Page Ref: 387 - 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

    
    


40. 
    

    A bank has excess reserves of $6,000 and demand deposit liabilities of $100,000 when the
    desired reserve ratio is 20 percent. If the reserve ratio is raised to 25 percent, the bank's excess
    reserves will be ____.
    A) -$5,000
    B) -$1,000
    C) $1,000
    D) $5,000
    Answer: C
    Diff: 2 Type: MC Page Ref: 387 - 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

    
    


41. 
    

    A bank has excess reserves of $4,000 and demand deposit liabilities of $100,000 when the
    desired reserve ratio is 20 percent. If the reserve ratio is raised to 25 percent, the bank's excess
    reserves will be ____.
    A) -$5,000
    B) -$1,000
    C) $1,000
    D) $5,000
    Answer: B
    Diff: 2 Type: MC Page Ref: 387 - 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