Economics For Today
10th Edition
ISBN: 9781337613040
Author: Tucker
Publisher: Cengage Learning
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Question
Chapter 25, Problem 16SQ
To determine
The authority that sets the
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When a commercial bank borrows from the Fed,
a.
it must be because the bank is not meeting its reserve requirements.
b.
the money supply falls.
c.
the bank can make more loans.
d.
the reserves of the bank fall.
What happens in a fractional reserve banking system? A. Bank panics cannot occur
b. The monetary system just be backed by good
c. Banks can create money through the lending process
d. The federal reserve has no control over the amount of money in circulation
In general, Banks earn profits by ...
Group of answer choices
a. Charging depositors an interest rate greater than the pay out to borrowers
b .Charging the Federal Reserve an interest for using the banks money
c. Charging borrowers an interest rate greater than they pay out to depositors
d .Earning payments from the Federal Reserve each time they borrow money from the Federal Reserve
Chapter 25 Solutions
Economics For Today
Ch. 25.3 - Prob. 1YTECh. 25 - Prob. 1SQPCh. 25 - Prob. 2SQPCh. 25 - Prob. 3SQPCh. 25 - Prob. 4SQPCh. 25 - Prob. 5SQPCh. 25 - Prob. 6SQPCh. 25 - Prob. 7SQPCh. 25 - Prob. 8SQPCh. 25 - Prob. 9SQP
Ch. 25 - Prob. 10SQPCh. 25 - Prob. 11SQPCh. 25 - Prob. 1SQCh. 25 - Prob. 2SQCh. 25 - Prob. 3SQCh. 25 - Prob. 4SQCh. 25 - Prob. 5SQCh. 25 - Prob. 6SQCh. 25 - Prob. 7SQCh. 25 - Prob. 8SQCh. 25 - Prob. 9SQCh. 25 - Prob. 10SQCh. 25 - Prob. 11SQCh. 25 - Prob. 12SQCh. 25 - Prob. 13SQCh. 25 - Prob. 14SQCh. 25 - Prob. 15SQCh. 25 - Prob. 16SQCh. 25 - Prob. 17SQCh. 25 - Prob. 18SQCh. 25 - Prob. 19SQCh. 25 - Prob. 20SQ
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Similar questions
- Which of the following is not a central bank? a. The Bank of England b. The Bank of Japan c. The Bank of America d. The Federal Reservearrow_forwardIn a system of 100-percent-reserve banking, a. banks do not accept deposits. b. banks do not influence the supply of money. c. loans are the only asset item for banks. d. banks can increase the money supply.arrow_forwardWhere does the Central Bank's profit go?arrow_forward
- The Federal Reserve a. was created in 1896. b. is part of the executive branch of government. c. is the central bank of the United States. d. is only responsible for controlling the money supply.arrow_forwardIn the United States, the Federal Reserve sets the reserve requirement, which banks must meet through deposits at the Federal Reserve district banks and cash held at the bank. What does this requirement achieve? Check all that apply. a. It ensures that banks cannot hoard money by holding too many reserves. b. It means that a bank must have one dollar of deposits for every dollar it lends out. c. It helps to prevent bank runs by reassuring the public that banks will not make too many loans and run out of cash. d. It helps to facilitate transfers of funds between banks when a customer from one bank writes a check to a customer of another bank.arrow_forwardHow to figure out the banks' excess reserves.arrow_forward
- The balance sheet for the newly formed ACME Bank is shown below. Reserves listed on the balance sheet are reserves on deposit at the Federal Reserve. Cash is vault cash held in the bank. Instructions: Enter your answers as a whole number. a. Fill in the missing value in the balance sheet. ACME Bank Balance Sheet Assets Cash Reserves Property Liabilities and net worth 15,000 Checkable deposits 102,000 Stock shares 116,000 310,000 b. If the reserve requirement is 25 percent, how much in excess reserves is the bank holding?arrow_forwardHow is a bank able to lend more money than it has in reserves?arrow_forwardIn the United States, which of the following systems was established to be in charge of money?Choose one answer.a. Federal Deposit Insurance Corporation b. Federal Savings and Loan Corporation c. Federal Reserve d. Standard and Poor’sarrow_forward
- Required reserves of banks are a fixed percentage of their a. deposits. b. All of these responses are correct. c. loans. d. assets.arrow_forwardWhat are bank reserves? a.Deposits that are held in the form of gold reserves b.The fraction of deposits kept as currency that are not used for lending purposes c.The value of the owner’s equity in the bank d.The value of investments a bank keeps in excess of the value of deposits e.The sum of all loans a bank makes to borrowersarrow_forwardThe central bank of the United States is: Answer a. The Bank of America b. The Federal Reserve System c. The U.S. Treasury d. Citibankarrow_forward
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