Ninth National Bank holds $200,000,000 in checkable deposits and $40,000,000 in

Question

Ninth National Bank holds $200,000,000 in checkable deposits and $40,000,000 in reserves. With a required reserve ratio of 15 percent, how much in excess reserves is Ninth National holding?

Question 17 options:

$10,000,000

$6,000,000

$30.000,000

$40,000,000

In a "self-regulating" market economy of Classical theory, a recessionary gap will be corrected, and the economy return to full employment through

Question 18 options:

forces internal to the economy, without government intervention.

This is a trick question. Classical economists believe recessionary gaps can never happen.

the timely actions of government economic policymakers.

never occur.

$10,000,000

$6,000,000

$30.000,000

$40,000,000

In a "self-regulating" market economy of Classical theory, a recessionary gap will be corrected, and the economy return to full employment through

Question 18 options:

forces internal to the economy, without government intervention.

This is a trick question. Classical economists believe recessionary gaps can never happen.

the timely actions of government economic policymakers.

never occur.

Explanation / Answer

Reserve=$200,000,000 x .15=$30,000,000,

Excess Reserve=$40,000,000-$30,000,000=$10,000,000

A is correct.

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