the economics of money, banking, and financial markets

496 $

© 2014 Pearson Canada Inc.$

30. 
    

    If the desired reserve ratio is one-third, currency in circulation is $300 billion, and chequable
    deposits are $900 billion, then the monetary base is ____.
    A) $300 billion
    B) $600 billion
    C) $333 billion
    D) $667 billion
    Answer: B
    Diff: 2 Type: MC Page Ref: 393
    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

    
    


31. 
    

    When the nonborrowed monetary base is equal to $200 billion, the borrowed reserves are
    equal to $100 billion, and the money supply is equal to $700 billion, the money multiplier is
    ____.
    A) 2.33
    B) 2.67
    C) 2.23
    D) 2.16
    Answer: A
    Diff: 3 Type: MC Page Ref: 393
    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

    
    


32. 
    

    The relationship between advances to banks, the nonborrowed monetary base, and the
    monetary base is ____.
    A) MB = MBn - BR
    B) BR = MBn - MB

    
    

C) BR = MB - MBn

D) MB = BR - MBn

Answer: C
Diff: 1 Type: MC Page Ref: 394
Skill: Recall
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