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Author Question: Only the required reserve ratio determines how much money the Federal Reserve can create. (Read 77 times)

imanialler

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Question 1

Refer to the information provided in Scenario 25.2 below to answer the question(s) that follow.



SCENARIO 25.2: 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 25.2. If the required reserve ratio were changed to 20%, total loans of Bank No. 2 will change to


◦ $64,000.
◦ $72,000.
◦ $74,250.
◦ $80,000.

Question 2

Only the required reserve ratio determines how much money the Federal Reserve can create.


◦ true
◦ false


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Marked as best answer by imanialler on Apr 19, 2019

fauacakatahaias

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