QUESTION 20 Which of the following laws increased competition among financial in

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QUESTION 20 Which of the following laws increased competition among financial institutions and gave the Fed greater control over sn O The Federal Reserve Act O The Equal Credit Opportunity Act . The Monetary Control Act banks? nmember The Thrift Bailout Bill QUESTION 21 A bank can lend out its excess reserves but not its required reserves True o False QUESTION 22 A bank creates money when it gets new checkable deposits which the depositor formerly held as cash. has a loan paid off, which creates excess reserves for the bank makes a loan from its excess reserves holds back excess reserves because of an increase in the required reserve ratio gets more excess reserves because of a decrease in the required reserve ratio QUESTION 23 Chok Save and Submit to sqve and submit, Click Save All Answers to save all answers

Explanation / Answer

20. The Monetary act, 1980 gave Fed greater control over the non member banks.

OPTION C

21. Required reserve ratio ensures the amount of reserves banks are mandatory to keep with the central bank. Banks can't lend out that amount.

OPTION A

22. Banks use the excess reserves to lend out the money in the form of loans which further increases the money supply and bank also creates money for itself through the interest charged on its deposits.

OPTION C

23. Reserve ratio is charged on the total deposits with the bank.

Here, deposits = $100,000.

Initial reserve ratio = 20% ; amount as excess reserves = 20%*100000 = $20,000

Revised reserve ratio = 15%, among as excess reserves = 15%*100000 = $15000

Therefore, the amount by which bank can increase its loans = 20,000-15,000 = $5000

OPTION D

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