question archive Suppose the banking system currently has $300 billion in reserves; the reserve requirement is 10 percent; and excess reserves amount to $3 billion
Suppose the banking system currently has $300 billion in reserves; the reserve requirement is 10 percent; and excess reserves amount to $3 billion
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Suppose the banking system currently has $300 billion in reserves; the reserve requirement is 10 percent; and excess reserves amount to $3 billion. What is the level of deposits?
a. $3,300 billion
b. $2,970 billion
c. $2,700 billion
d. $2,673 billion
Consider five individuals with different occupations. Allen prepares taxes wants ribs Betty does dry cleaning wants computer fixed Calvin fixes computers wants bread Diedre bakes bread wants taxes prepared Eric barbecues ribs wants dry cleaning In a barter system which of the following pairs has a double coincidence of wants?
a. Allen and Eric
b. Diedre and Calvin
c. Both A and B are correct.
d. None of the above are correct.
Which of the following is an asset of a bank and a liability for its customers?
a. deposits of its customers and loans to it customers
b. deposits of its customers but not loans to its customers
c. loans of its customers but not the deposits of its customers
d. neither the deposits of its customers nor the loans to its customers
The members of the Federal Reserve?s Board of Governors
a. are elected to office by the public every fourteen years.
b. are nominated by the U.S. Senate banking committee and confirmed by the U.S. house of representatives.
c. are elected by bankers in each Federal Reserve Region.
d. are appointed by the president of the U.S. and confirmed by the U.S. Senate.
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Required reserves = total reserves - excess reserves
Required reserves = $300 - $3 = $297 billion.
Reserve ratio = 10% of the deposits
297 = 0.1 * deposits
deposits = 297 / 0.1
deposits = $2970 billion
First Question: Option B $2970 billion is correct.
Second Question: Option D. none of the above is correct.
Double coincidence of wants implies both the parties agree to exchange goods and services with each other. What one wants, the other has it.
None of the options have double coincidence of wants.
Third Question: Option C loans of its customers but not the deposits of its customers is correct.
Loans is the asset of the bank as it has lent out its excess reserves.
Fourth Question: Option D are appointed by the president of the U.S. and confirmed by the U.S. Senate is correct.
They are appointed by the president and confirmed by the senate.
