No excess reserves in the banking system

Assignment Help Business Economics

Reference no: EM13982337

Suppose that there are no excess reserves in the banking system and the current amount of checkable deposits are equal to $100,000. Now the monetary authorities raise the required reserve ratio from 5% to 10%. Which of the following will likely follow? The amount of excess reserves in the banking system will rise. The amount of excess reserves in the banking system will remain the same. The money creating potential of the banking system will decline. The money creating potential of the banking system will rise.

Reference no: EM13982337

Questions Cloud

Assume the total population : Assume the total population is 180 million and there are 1 million discouraged workers, 9 million unemployed workers, 20 million part-time workers and 121 million workers employed full time. The unemployment rate is: 5 percent 6 percent 6.4 percent 7..

Evaluate and comment on both the immediate and long term : During a meeting of the management committee of Edsel Corporation, a number of proposals are made to alleviate its weak cash position and improve income.

What will happen to the unemployment rate : Suppose that in a particular month roughly 8 million people in the United States were seeking jobs but had not found them. Suppose that 2 million of these people give up their searches in the following month and stopped looking for work. What will ha..

Describe strong and weak interactions classically : Electromagnetic interaction has classical electromagnetism as its classical limit. Is it possible to similarly describe strong and weak interactions classically?

No excess reserves in the banking system : Suppose that there are no excess reserves in the banking system and the current amount of checkable deposits are equal to $100,000. Now the monetary authorities raise the required reserve ratio from 5% to 10%. The amount of excess reserves in the ban..

Supply private-label brands : Should national brand manufacturers also supply private-label brands?

How did captain edwards demonstrategood change leadership : Through the use of this model, how did Captain Edwards demonstrategood change leadership and How might youapply in what you do in your organization

Analyse the effects of globalisation : Also choose examples from your own experience or find appropriate cases on the web that you can discuss. Credit will be given for references you make to relevant examples from real companies

A surplus exists in a market if : A surplus exists in a market if

User Account

All Pages