Question: The basic reason why the commercial banking system can increase its checkable deposits by a multiple of its access reserves is that: Reserves lost by

The basic reason why the commercial banking system can increase its checkable deposits by a multiple of its access reserves is that: Reserves lost by any particular Bank will be keen by some other Bank The central bank follow polices that prevent reserves from falling below required by law The MPC of borrowers is greater than zero but less than one The banking system must keep reserves equal to 100% of its checkable deposit liabilities

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

The basic reason why the commercial banking system can increase its checkable deposits by a multiple of its excess reserves is that: Multiple Choice the MPC of borrowers is greater than zero but less...

The basic reason why the commercial banking system can increase its demand deposits by a multiple of its free reserves is that: a . the banking system must keep reserves equal to 1 0 0 percent of its...

questions 5-9. thank you 5. If actual reserves in the banking system are $57,499 and checkable deposits are $196,060, then the monetary multiplier is: A. 3.41 B.4.41 C. 5.00 D. 10.00 6. If we both...

Can you help me with questions 5-8 tnx. D.$155,740 5. If actual reserves in the banking system are $40.294 and checkable deposits are $243,940, then the monetary multiplier is: A. $6.05 B. $7.05 C....

answer the next question(s) on the basis of the following table for a commercial ank or thrift: Table 5 Reserve Requirement Deposits Total Reserves Excess Reserves 10 W $88,381 $6,962 $1,000 2l 10%...

The primary factor enabling the Canadian chartered banking system to increase its demand deposits several times over its excess reserves is due to: Multiple Choice the banking system must keep...

ce What would the consolidated balance sheet of the commercial banks look like after the commercial banks fully adjusted (they are fully adjusted when they are maximizing profits again) to their sale...

Question 19 Managers play a strategic role in a company's performance and growth. Their responsibilities include: Setting and tracking goals Increasing team productivity Training and motivating...

Answer the question on the basis of the given consolidated balance sheet of the commercial banking system. Assume that the reserve requirement is 10 percent. All figures are in billions. Assets...

Economics 1 Module Test V Multiple Choice. 1. One reason why inflation if undesirable is that a. it causes loss to lenders and savers who do not anticipate it. b. it benefits buyers, not sellers. c....

Using the Lowes and Whirlpool example in the chapter as a setting, discuss what you think are some of the issues involved for each firm as the relationship progresses from initiation to maturity.

In a recent Wall Street Journal article, the author notes that various retailers in the U.S. (e.g., Meijer, Inc., Gap, Inc., Office Depot, Inc., and Toys R Us, Inc.) are turning to consulting firms,...

A ( n ) _ _ _ _ event is a specific, uncertain event that may occur to the detriment or enhancement of the project. Group of answer choices unplanned risk chance hidden

How could an ES be used to detect probable fraud committed by a bank employee?

Amber Mining and Milling, Inc., contracted with Truax Corporation to have constructed a custom-made lathe. The machine was completed and ready for use on January 1, 2018. Amber paid for the lathe by...

Prachi Company produces and sells disposable foil baking pans to retailers for $2.45 per pan. The variable costs per pan are as follows: Direct materials ........$0.27 Direct labor ..........0.58...

How did the SarbanesOxley Act impact corporations financial reports?

What is a management control system?

Among a group of 5 8 programmers, who know either Java or Python or both, 1 5 only know Java and 1 3 only know Python. What is the probability of randomly choosing a programmer who knows both...

On January 1, 2000, Snow Company was authorized to issue 100,000 shares of common stock, par value $\$ 10$ per share and 10,000 shares of 8 percent preferred stock, par value $\$ 20$ per share....

On January 1, 2000, Oldroyd Corporation had 130,000 shares of common stock issued and outstanding. During 2000, the following transactions occurred (in chronological order). a. 10.000 new shares of...

Provide the necessary journal entries to record the following: a. Fayette Corporation was granted a charter authorizing the issuance of 100,000 shares of $\$ 16$ par-value common stock. b. The...