QUESTION 21
Bank panics have largely disappeared in the United States because
a. of low interest rates.
b. banks are now required to hold at least 75% of deposits as reserves.
c. Bank loans are more closely monitored by the Federal Reserve.
d. of deposit insurance.
QUESTION 22
Banks create money by
a. printing money up to their required reserve limit
b. printing dollar bills without limit
c. creating deposits without limit
d. making loans and creating deposits, a process that is limited by the size of banks' excess reserves.
QUESTION 23
if the required reserve ratio is 7 percent and a bank has $10,000 of deposits, then its reserves are
a. $930
b. $7,000.
c. $7
d. $700
QUESTION 24
If the bank of Waterloo receives a $10,000 deposit and the reserve requiremant is 10 percent, how much can the bank loan out before the deposit this bank is just meeting its legal reserve requirement.
a. $1,000
b. $9,000
c. $10,000
d. $11,000
