Multiple Choice
People hold $400 million of bank deposits but no currency.Banks have made $380 million dollars of loans and only hold enough reserves to satisfy reserve requirements.Because of uncertainty,banks choose to hold $10 million more in reserves.The Fed takes no action.What happens to bank loans?
A) they fall $220 million
B) they fall $200 million
C) they rise $200 million
D) they rise $220 million
Correct Answer:
Verified
Correct Answer:
Verified
Q28: At one time,people in a certain country
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Q30: The discount rate is the interest rate
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Q32: Which of the following will not help
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Q35: Other things the same,if reserve requirements are
Q36: The Fed's control of the money supply
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Q38: What does the Fed auction at the