53.Best National Bank is subject to a 20 percent required reserve ratio. If this bank received a new checkable deposit of $1,000, it could make new loans of:a.$500.c.$1,000.b.$800.d.$5,000.ANS:B

PTS:1DIF:ModerateNAT:BUSPROG: AnalyticTOP:Multiplier Expansion of Money by the Banking SystemKEY:Bloom’s: Comprehension54.If a bank that is subject to a 10 percent required reserve ratio has $20,000 in excess reserves, it can make new loans of:

PTS:1DIF:ChallengingNAT:BUSPROG: AnalyticTOP:Multiplier Expansion of Money by the Banking SystemKEY:Bloom’s: Application55.Suppose the required reserve ratio is 3 percent, and currency and reserves total $10 million. The maximum money supply that can be supported is:

PTS:1DIF:EasyNAT:BUSPROG: AnalyticTOP:Multiplier Expansion of Money by the Banking SystemKEY:Bloom’s: Comprehension56.If a single banks faces a required reserve ratio of 20 percent, has total reserves of $500,000, and checkable deposit liabilities of $400,000, what is the maximum amount of money this bank could create (add to the money supply)?

PTS:1DIF:ChallengingNAT:BUSPROG: AnalyticTOP:Multiplier Expansion of Money by the Banking SystemKEY:Bloom’s: Comprehension57.Assume a simplified banking system in which all banks are subject to a uniform reserve requirement of 20 percent and checkable deposits are the only from of money. A bank that received a new checkable deposit of $10,000 would be able to extend new loans up to a maximum of:a.$2,000.c.$9,000.b.$8,000.d.$10,000.ANS:B

PTS:1DIF:EasyNAT:BUSPROG: AnalyticTOP:Multiplier Expansion of Money by the Banking SystemKEY:Bloom’s: Comprehension58.If a bank receives a new checkable deposit of $10,000, and the required reserve ratio is 20 percent, then the bank can lend out:

PTS:1DIF:EasyNAT:BUSPROG: Analytic

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TOP:Multiplier Expansion of Money by the Banking SystemKEY:Bloom’s: Comprehension59.Suppose a bank has checkable deposits of $100,000 and the required reserve ratio is 20 percent. If the bank currently has $100,000 in reserves, it could expand the money supply by as much as:

PTS:1DIF:EasyNAT:BUSPROG: AnalyticTOP:Multiplier Expansion of Money by the Banking SystemKEY:Bloom’s: Comprehension60.A bank creates money when it:

PTS:1DIF:ModerateNAT:BUSPROG: AnalyticTOP:Multiplier Expansion of Money by the Banking SystemKEY:Bloom’s: Comprehension