Exhibit 15-3 Balance sheet of Tucker National Bank
AssetsLiabilities
Required reserves$ 20,000Checkable deposits$100,000
Excess reserves0
Loans80,000
Total$100,000Total$100,000
184.The required reserve ratio in Exhibit 15-3 is:
a.10 percent.c.80 percent.
b.20 percent.d.100 percent.
185.Suppose Connie Rich deposits $100,000 into her checking account in the bank shown in Exhibit 15-3. The result would be a:
a.$20,000 increase in excess reserves.c.$100,000 increase in required reserves.
b.$20,000 increase in required reserves.d.zero change in required reserves.
186.Assume all banks in the system started with balance sheets as shown in Exhibit 15-3 and the Fed made a $100,000 open market purchase. The result would be a(n):
a.$500,000 expansion of the money supply.
b.$100,000 expansion of the money supply.
c.$20,000 contraction of the money supply.
d.infinite contraction of the money supply.
e.infinite expansion of the money supply.
187.Assume the Fed purchases a government security from a private dealer and pays with a Fed check of $100,000. If this check is deposited by the dealer in the bank shown in Exhibit 15-3, the bank can extend new loans in the amount of:
a.$20,000.c.$100,000.
b.$80,000.d.$120,000.
Exhibit 15-4 Balance sheet of Tucker National Bank
AssetsLiabilities
Required reserves$ 4,000Checkable deposits$20,000
Excess reserves16,000
Loans0
Total$20,000Total$20,000
188.The required reserve ratio in Exhibit 15-4 is:
a.5 percent.c.15 percent.
b.10 percent.d.20 percent.
189.Suppose Connie Rich deposits $500 in the bank in Exhibit 15-4. The result would be that the bank must increase its required reserves to:
a.$4,100.c.$5,100.
b.$4,500.d.$5,500.
190.In Exhibit 15-4, the bank could make:
a.$1,000 in new loans.c.$16,000 in new loans.
b.$4,000 in new loans.d.$20,000 in new loans.
191.Assume all banks in the system started with the balance sheet shown in Exhibit 15-4 and the Fed makes a $1,000 open market purchase. The result would be a(n):
a.infinite contraction of the money supply.c.$1,000 expansion of the money supply.
b.infinite expansion of the money supply.d.$5,000 expansion of the money supply.
