1 A) $2 billion B) $18 billion C) $20 billion D) $200 billion 2 A) neither Bank A's nor Bank B's deposits or reserves are affected B) Bank A gains reserves equal to $100 and Bank B gains deposits equal to $100 C) Bank A loses reserves and deposits equal to $100 D) Bank B loses reserves and deposits equal to $100 3 A) $45,000 B) $50,000 C) $55,000 D) $5,000 4 A) the money supply declines by $50,000 B) the money supply increases by $50,000 C) the bank's excess reserves will decrease by $50,000 D) the bank's required reserves will increase by $50,000 5 A) required reserves B) total reserves C) excess reserves D) total deposits 6 A) loans are repaid B) the net worth of the banking system is increased C) banks exchange some of the state and local bonds in their portfolio for federal government bonds D) banks make additional loans 7 A) the money multiplier will decrease B) bank profitability will likely decrease C) banks will be forced to accumulate reserves by reducing their lending activity D) the money supply will likely increase 8 A) in the bond market B) in the Federal deposit market C) from its own depositors D) in the Federal funds market 9 A) one B) the inverse of actual reserves minus required reserves C) the inverse of one minus the required reserve ratio D) the inverse of the required reserve ratio 10 A) $5,000 B) $10,000 C) $40,000 D) $50,000
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