Suppose a bank has 1,000 in deposits and 100 in reserves. If the desired reserve ratio is 5 percent, how much can this bank increase its loans?
A) 80 B) 0 C) 100 D) 400 E) 50
Question 2
An increase in Swiss interest rates will cause
A) an increase in the demand for U.S. dollars and an increase in the exchange rate of Swiss francs per dollar.
B) a decrease in the demand for U.S. dollars and a decrease in the exchange rate of Swiss francs per dollar.
C) an increase in the supply of U.S. dollars and a decrease in the exchange rate of Swiss francs per dollar.
D) a decrease in the supply of U.S. dollars and an increase in the exchange rate of Swiss francs per dollar.
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