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Daytona State College - PB ECO2013 chapter12 1)Assume that the Empathy State Bank begins with the balance sheet below and is fully loaned up

Economics

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Daytona State College - PB ECO2013

chapter12

1)Assume that the Empathy State Bank begins with the balance sheet below and is fully loaned up. What it is the amount of this banks reserve?

 

 

 

 

2 The fractional reserve banking system refers to a system in which banks:

 

 

 

 

3. If the reserve requirement is 25%, a new deposit of $1,000 leads to a potential increase in the money supply of:

 

 

 

 

4. Sumit deposits $1,500 cash into his checking account. The reserve requirement is 25%. How many dollars' worth of loans can the banking system create?

 

 

 

 

 

 

 

 

5. The money multiplier is:

 

 

 

 

6. If the reserve requirement is 1%, what is the money multiplier?

 

 

 

 

7. Tighter lending standards tend to ____ the money multiplier, making it ____ for the Fed to use its tools effectively.

 

 

 

 

8. Which of the following is a provision of the Federal Reserve Act or subsequent legislation that weakens the independence of the Fed?

 

 

 

 

9. Which of the following statements is CORRECT?

 

 

 

 

10. Which of the following is a basic goal of the Federal Reserve System?

 

 

 

 

11. The _____ is the central bank of the United States.

 

 

 

 

12. The Chairman of the Board of Governors is appointed for a _____ renewable term

 

 

 

 

13. The 12 Federal Reserve banks and their branches do all of the following except:

 

 

 

 

14. The main policymaking arm of the Fed is the

 

 

 

 

15. Which of the following is NOT a lag inherent in monetary policy?

 

 

 

 

16. A lower reserve requirement

 

 

 

 

17. The main tool of monetary policy is

 

 

 

 

18. The discount rate is:

 

 

 

 

19. If the Fed wants to raise the federal funds rate, it will ______ bonds, which ________ bond prices.