12. A Eurodollar loan is a(n): a. ECU-denominated loan issued by a U.S. bank. b. dollar-denominated loan payable to a European bank. c. ECU-denominated loan that is subject to banking regulations in both the United States and Europe. d. dollar-denominated loan issued outside the U.S. domestic banking system. e. loan by the European Community to the U.S. government. Table 12.2 Balance Sheet Assets Liabilities Cash $ 5,000 Demand Deposits $20,000 Loans 15,000 Total Assets $20,000 Total Liabilities $20,000 13. Refer to Table 12.2. With a reserve requirement of 20 percent, the bank has excess reserves of _____. a. $5,000 b. $3,000 c. $2,000 d. $1,000 e. $2,500 14. Refer to Table 12.2. Assume a reserve requirement of 10 percent. The maximum amount of new loans the bank could extend is _____. a. $500 b. $1,000 c. $2,000 d. $3,000 e. $4,000 The table given below records the amount of new deposits, the value of required reserves, and total amount loaned out by Banks 1, 2, and 3. Table 12.3 Bank New Deposit Required Reserves Loans Bank 1 $10,000 $1,000 $9,000 Bank 2 $9,000 $900 $8,100 Bank 3 $8,100 $810 $7,290 *Assume all excess reserves are loaned out. 15. Refer to Table 12.3. What is the total increase in the money supply created in the banking system as a result of the initial deposit of $10,000 in Bank 1? a. $10,000 b. $27,100 c. $100,000 d. $90,000 e. $20,000

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