Question 1
Refer to the information provided in Scenario 25.1 below to answer the question(s) that follow.
SCENARIO 25.1: The following table shows the changes in deposits, reserves, and loans of 4 banks as a result of a $100,000 initial deposit in Bank No. 1. Assume all banks are loaned up.
Refer to Scenario 25.1. If the required reserve ratio were changed to 10%, total loans of Bank No. 2 will change to
◦ 77,400.
◦ 81,000.
◦ 85,000.
◦ 90,000.
Question 2
Refer to the
Economics in Practice on p. 513: The
Economics in Practice feature discusses three examples of many people who have claims on a bank presenting those claims at the same time. This describes a situation known as
◦ barter.
◦ a bank run.
◦ currency debasement.
◦ the liquidity property of money.
The Economics of Money, Banking and Financial Markets, Business School Edition
Economics question
Economics question
Economics question
Economics question
Ferrante, Chapter 11, Economics & Politics