Economic questions!!!?
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1The ABC Commercial Bank has $5,000 in excess reserves and the reserve ratio is 30 percent. The bank must have:
a. $90,000 in outstanding loans and $35,000 in reserves. b. $90,000 in checkable deposit liabilities and $32,000 in reserves. c. $20,000 in checkable deposit liabilities and $10,000 in reserves. d. $90,000 in checkable deposit liabilities and $35,000 in reserves.
2 Commercial banks create money when they:
a. accept cash deposits from the public. b. purchase government securities from the central banks.
3 Suppose the reserve requirement is 10 percent. If a bank has $5 million of checkable deposits and actual reserves of $500,000, the bank:
a. can safely lend out $500,000. b. can safely lend out $5 million. c. can safely lend out $50,000 d. cannot safely lend out more money
Economic questions!!!?1)
without a doubt b
(90,000*.3)+5000=32000 reserves
2) given those choices a
3) d because it will need more reserves
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