0 million in deposits, $15 million in required reserves, and $85 million in loan
ID: 1110639 • Letter: 0
Question
0 million in deposits, $15 million in required reserves, and $85 million in loans. Bank A's reserve ratio is: A 15% B 2096. C. 7596. D 10% QUESTION 29 Suppose the reserve ratio is 20% for all banks. If the Fed increases bank reserves by $200, then the money supply will O A increase by $400 B. decrease by $400 D decrease by $1,000 QUESTION 30 If s g grows by 2%, real GDP growth is 5%, and velocity is stable, then prices will be at a rate of according to the aggregate dem B rising: 2% C falling. 3%Explanation / Answer
28) Required reserve=Required reserve ratio*demand deposit. It is mentioned that required reserve=$15 million and demand deposit=$100 million.
Therefore, Required reserve ratio=Required reserve/demand deposit=15/100=15%. Therefore the option A is correct.
29) Money supply=Required reserve ratio*change in excess reserve.
=0.20*200=$400. Therefore the option A is correct
30) When government expenditure rises, aggregate demand increased. So price is increased. Here government expenditure increased by 2%. So price will be risen by 2%. Therefore the option B is correct.
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