13Decreasing the reserve requirement:

Select one:

a.reduces excess reserves and the money supply.

b.increases excess reserves and the money supply.

c.reduces excess reserves and increases the money supply.

d.increases excess reserves and reduces the money supply.

16If a commercial bank has $160 million in deposits, $40 million in actual reserves, and a reserve requirement of 20 percent, that bank can make new loans of:

Select one:

a.$8 million.

b.$32 million.

c.$128 million.

d.$160 million.

20The effect on interest rates and the amount of loans made caused by a drop in a bank's required reserves is shown by the movement from:

Select one: NO TABLE WAS PROVIDED

a.D1 to D2 in Figure A.

b.D1 to D2 in Figure B.

c.S1 to S2 in Figure C.

d.S1 to S2 in Figure D.