1. The following information pertains to the Bank of the Kawarthas.

Bank of the Kawarthas
Assets:		Liabilities:
Reserves	$3,500	Deposits	$70,000
Loans	$66,500

Refer to Table 10-4. Assume that all banks hold the same reserve ratio as the Bank of the Kawarthas. What is the money multiplier?

a. 19

b. 20

c. 3.5

d. 17.5

2. The following information pertains to the Bank of the Kawarthas.

Bank of the Kawarthas
Assets:		Liabilities:
Reserves	$3,500	Deposits	$70,000
Loans	$66,500

Refer to Table 10-4. Assume that all other banks hold only the required 4 percent of deposits as reserves, and that people hold only deposits and no currency. If the Bank of the Kawarthas decides to hold reserves of 4 percent, by how much would the economy's money supply increase?

a. $17,500

b. $35,000

c. $-35,000

d. $-17,500

e. None of the above

3. The following information pertains to the Bank of the Kawarthas.

Bank of the Kawarthas
Assets:		Liabilities:
Reserves	$3,500	Deposits	$70,000
Loans	$66,500

Refer to Table 10-4. If the Bank of the Kawarthas has lent out all the money it can, then what is its reserve ratio?

a. 20 percent

b. 0 percent

c. 100 percent

d. 5 percent

4. The following information pertains to the Bank of the Kawarthas.

Bank of the Kawarthas
Assets:		Liabilities:
Reserves	$3,500	Deposits	$70,000
Loans	$66,500

Refer to Table 10-4. If all banks hold only the required 4 percent of deposits as reserves, then what is the money multiplier?

a. 10

b. 5

c. 15

d. 25