B) currency in circulation and reserves. C) currency in circulation and Federal
ID: 1109920 • Letter: B
Question
B) currency in circulation and reserves. C) currency in circulation and Federal Reserve notes D) currency in circulation and the US. Treasury's monetary liabilities. 13) The relationship between borrowed reserves (BR), the nonborrowed monetary base (MBn) and 13) the monetary base (MB) is A) MB MBn-BR C) BR-MB-MBn B) MB BR-MBn D) BR= MBn_ MB. 14) 14) The Fed does not tightly control the monetary base because it does NOT completely control A) open market sales. C) the discount rate. B) open market purchases. D) borrowed reserves. 15) 15) The three players in the money supply process include A) banks, borrowers, and the central bank. B) banks, depositors, and borrowers C) banks, depositors, and the US. Treasury D) banks, depositors, and the central bank. 16) 16) In the simple deposit expansion model if the Fed purchases $100 worth of bonds from a bank that previously had no excess reserves, the bank can now increase its loans by A) $10. B) $100. C) 5100 times the reciprocal of the required reserve ratio. D) $100 times the required reserve ratio. 17) 17) If the required reserve ratio is 10 percent, the simple deposit multiplier is B) 10.0 C) 5.0 D) 2.5. A) 100.0.Explanation / Answer
13.
The relationship between borrowed reserves, the non-borrowed monetary base and the monetary base is BR= MB-MBn
14. the Fed does not tightly control the monetary base because it does not completely control, borrowed reserves.
15. The three players in the money supply process include banks, depositor and the central banks.
16. $100
17. formula for simple deposit multiplier is D = 1/rr × R , hence correct option is 10
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