29) Refer to Table 1. This bank operates in a A) system of 0-percent-reserve ban
ID: 1116236 • Letter: 2
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29) Refer to Table 1. This bank operates in a A) system of 0-percent-reserve banking. B) system of 100-percent-reserve banking. C) system of Federal-Reserve banking D) fractional-reserve banking system. 30) Refer to Table 1. The bank's reserve ratio is A) 7.50 percent. B) 8.12 percent. C) 92.50 percent. D) 100 percent. 31) Refer to Table 1. If all banks in the economy have the same reserve ratio as this bank, then an increase in reserves of $150 for this bank has the potential to increase deposits for all bhks by A) $866.67. B) $1,666.67. C) $2,000.00. D) an infinite amount. 32) Refer to Table1. If all banks in the economy have the same reserve ratio as this bank, then the value of the economy's money multiplier is A) 1.33. B) 10.00. C) 10.81. D) 13.33. 33) In a system of 100-percent-reserve banking, banks do not make loans. B) currency is the only form of money C) deposits are bapks' only assets. D) All of the above are correct. 34) In a fractional-reserve banking system, a bank A) does not make loans B) does not accept deposits. C) keeps only a fraction of its reserves in deposits. D) keeps only a fraction of its deposits in reserve. 35) The quantity of money demanded A) is the total currency in circulation. B) is the same as the money supply. C) is equal to real GDP D) is the money that people choose to hold. E) changes only when real GDP changes.Explanation / Answer
33). The answer should be all the above.
This is because if all the money is put into reserves, then bank will not be able to make loans. Also the banks assets, which are generally bonds, reserves, gold etc. are equated with the liability i.e money. Now if the value of money equals the value of value of reserves, then bank's only assets will be reserves
34). D). The anser is D)
This is because, in a fractional reserve banking system, a part of deposits by the customers is kept as reserves to meet contingencies in the future.
35). The answer is B).
This is because, that in an equilibrium we always assume that Quantity of Money Demanded = Quantity Supplied
The first 4 questions have not been answered since the picture of the concerned table has not been provided.
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