Chapter 14 Quiz
Use the following to answer questions
l-3:
Answer the next question(s) on the basis of the following table for a commercial bank or thrift:
Reserve
requirement, Checkable Actual
(r)
w
(2)8X20.000[.000
(3)
2
(4)
20
I
s
Excess
reserves
st00,000 sr0.000 s
200.000 \'
300,000 70.000
0
8.000
z
1. Refer to row 1 in the above table. The number appropriate for space W is:
A)
B)
4.
6.
c) 10.
D) 12.
2. Refer to row 4 in the above table. The number appropriate for space Z is:
A)
B)
c)
D)
$10.000.
$70,000.
$48,000.
zero.
3. Refer to row 3 in the above table. The number appropriate for space Y
A)
B)
c)
D)
$24,000.
$32,000.
$48,000.
$96,000.
4. A bank's actual
A)
B)
C)
D)
reserves can be found by:
adding its required and excess reserves.
subtracting its required reserves from its excess reserves.
rnultiplying its excess reserves by the reserve ratio.
rnultiplying its checkable deposits by the reserve ratio.
Page
I
is:
The value of tl-re monetary multiplier is:
5
A)
B)
c)
D)
6
1/Excess Reserves.
l/MPC.
l/Required Reserve Ratio.
If actual reserves in the banking system are $8,000, checkable deposits are
$70,000, and
the legal reserve ratio is l0 percent, then excess reserves are:
A) zeto.
B)
$ 1.000.
D)
$2.000.
$soo.
c)
7.
l/MPS.
The legal reserve ratio applies to checkabre deposits at:
national banks.
credit unions.
savings and loans.
institutions of all of the above types.
A)
B)
C)
D)
8
which of the following are ail
A)
B)
C)
D)
assets to a commerciar bank?
demand deposits, capital stock, and reserves
vault cash, property. and reserves
vault cash, property, and capital stock
vault cash, capital stock. and demand deposits
9.
ulrement ts to:
vault cash.
authorities can influence the lending ability
c)
D)
10.
prevent commercial banks from earning excess profits.
provide a dependable source of interesiincome io..o--.rcial
Money is destroyed when:
A) loans are made.
B) checks written on one bank are deposited in another bank.
C) loans are repaid.
D) the net worth of the banking system declines.
Page 2
banks.