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"Education is the most powerful weapon which you can use to change the world”
– Nelson Mandela

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Money, Banks, and Monetary Policy Test

Money, Banks, and Monetary Policy Test

Q 1./Initially a bank has a minimum reserve requirement of 10 percent and no excess reserves. If $10,000 is deposited in the bank, then ceteris 2.When a bank makes a loan 3.If the required reserve ratio is 5 percent, the money multiplier is 4.The potential for deposit creation is 5.Which of the following is an essential function performed by banks?

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1.the bank can increase its loans by $9,000. 2.it causes an increase in the money supply. 3.20.0. 4.the number of dollars that the banking system can create from current excess reserves. 5.transferring funds from savers to spenders