If a bank's required reserves equal $270,000, no excess reserves are held, and the reserve requirement is equal to 18 percent, what is the value of the bank's total deposits?
a. $900,000
b. $1,500,000
c. $48,000
d. $486,000
e. $150,000
Table 12.2
Balance Sheet
Assets
Cash $5,000
Loans $15,000
Total Assets $20,000
Liabilities
Demand Deposits $20,000
Total Liabilities $20,000
7. Refer to Table 12.2. With a reserve requirement of 20 percent, the bank has excess reserves of
a. $5,000
b. $3,000
c. $2,000
d. $1,000
e. $2,500
Refer to Table 12.2. Assume a reserve requirement of 10 percent. The maximum amount of new loans the single bank could extend is
a. $500
b. $1,000
c. $2,000
d. $3,000
e. $4,000
4. If a banking system receives an initial deposit of $150,000 and the reserve requirement is 40 percent, the total deposit in the banking system (including the initial deposit) can be expanded by
a. $375,000
b. $150,000
c. $60,000
d. $250,000
e. $450,000
10. The Federal Open Market Committee consists of:
a. the 12-member Board of Governors.
b. seven members of the Board of Governors and five district presidents.
c. the president of the New York district bank and the members of the Council of Economic Advisers.
d. the chairman of the Board of Governors and five district presidents.
e. seven members of the Board of Governors and a nine-member board of directors of the district banks.
