The balance sheet of the central bank is
Assets Liabilities
Gov't bonds $5000 Currency $2100
Gold $500 Reserves of commercial banks $3400
The consolidated balance sheet of commercial banks is
Assets Liabilities
Reserves at the central bank $3400 Deposits $14400
Loans $12000 Commercial bonds issued by banks $1000
If the required reserve-deposit ratio is 15%, can commercial banks increase the amount of loans by at least $1000?
A. Yes, by buying back the bonds and depositing the proceeds into the reserve account at the central bank.
B. Yes, by lowering reserves by $1000.
C. No, because the amount of deposits exceeds the amount of loans.
D. Yes, but only if some of the newly issued loans are redeposited to the banks.
E. No, because then the reserve-deposit ratio will fall below 15%.
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “The balance sheet of the central bank is Assets Liabilities Gov't bonds $5000 Currency $2100 Gold $500 Reserves of commercial banks $3400 ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Eric is in a group with five other management trainees at Coca-Cola. Eric's group is competing against other management trainees at the firm in a simulated marketplace.
Answers (2)
Because of multiple physical injuries and emotional concerns, a hospitalized client is at high risk to develop a stress ulcer (Curling). Which of these is evidence of a stress ulcer?
Answers (1)
Adjusting entries are a. needed to bring accounts up to date and match revenue and expense b. the same as correcting entries c. rarely needed in large companies d. optional under generally accepted accounting principles
Answers (1)
When using survey feedback activities: Managers analyze survey data to solve problems Employees do problem solving based on data Only consultants are allowed to see survey data Employees and consultants work together to create surveys
Answers (2)
For each of the following, compute the future value (Do not round intermediate calculations and round your final answers to 2 decimal places. (e. g., 32.
Answers (1)
New Questions in Business
The following information is from the 2017 records of Armand Music Shop: Accounts receivable, December 31, 2017 $43,000 (debit) Allowance for Bad Debts, December 31, 2017 prior to adjustment 1,500 (debit) Net credit sales for 2017 178,000 Accounts
Answers (1)
Green Glass recently pays dividends. Future dividends are projected at $2.5, $3.5, and $4.5 over the next three years, respectively. Beginning four years from now, the annual dividend is expected to grow at 4% annually forever.
Answers (1)
What are two tasks (out of several) commonly performed by operating systems?
Answers (1)
Question 2 1 pts How much is the fine for your thost offense for failure to keep insurance? $1000 $400 $200 $20
Answers (2)
A movie company makes 500,000 DVDs of one of its latest releases. It sells 300,000 of them before the end of the second quarter, and holds the others in its warehouse. How will the 200,000 unsold DVDs be treated in the GDP statistics?
Answers (1)