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20 Mar 2018

The banking system in the U.S. is based on:

A. None of the above

B. 0 percent reserve banking

C. 100 percent reserve banking

D. Fractional reserve banking

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12 Mar 2023
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Related questions

Suppose the simplified consolidated balance sheet shown below is for the entire commercial banking system and that all figures are in billions of dollars. The reserve ratio is 25 percent. Instructions: Refer to the balance sheet below. Enter your answers as whole numbers. a. What is the amount of excess reserves in this commercial banking system? What is the maximum amount the banking system might lend? Show in columns 1(a) and 1'(a) how the consolidated balance sheet would look after this amount has been lent. What is the size of the monetary multiplier? b. Using the original figures, answer the questions in part a assuming the reserve ratio is 20 percent. What is the amount of excess reserves in this commercial banking system? What is the maximum amount the banking system might lend? Show in columns 1(b) and 1'(b) how the consolidated balance sheet would look after this amount has been lent. What is the monetary multiplier? What is the resulting difference in the amount that the commercial banking system can lend when the required reserve ratio is 20 percent rather than 25 percent? .

In the U.S. economy, the money supply is controlled by the:
A. Congress.
B. Federal Reserve System.
C. Senate Committee on Banking and Finance.
D. US treasury. 
In a 100 percent reserve banking system, banks:
 
(i) can create a money supply indefinitely.
(ii) can create a money supply only by the multiple of 100.
(iii) cannot create a money supply at all.
(iv) none of the above.

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