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16 Suppose the Federal Reserve increases deposits at financial institutions by $77 billion through its open market operations. If the reserve requirement for all deposits

16
  1. Suppose the Federal Reserve increases deposits at financial institutions by $77 billion through its open market operations. If the reserve requirement for all deposits is 8%, what is the maximum impact the Fed's actions can have on total deposits?

    $____________ billion increase.

    (Your answer should be entered as a NUMBER ONLY, rounded to one decimal place).

2 points

QUESTION 17
  1. A small state bank currently has reserves equal to $550,000. If the state reserve requirement is 20%, but the bank feels more comfortable with maintaining a 30% reserve, what amount of deposits does the bank currently have? (Note: Enter your number using ONLY numbers and round to the nearest whole dollar).

2 points

QUESTION 18
  1. Suppose the reserve requirement for transaction deposits is 10% and it is 5% for nontransaction deposits. What is the total reserve requirement, in millions, for a bank with total deposits equal to $500 million, if $100 million of these deposits are classified as transaction deposits? (NOTE: Enter your answer as numbers only and round to the nearest whole dollar). Example - if your answer is $72 million, simply enter the number 72

2 points

QUESTION 19
  1. Suppose the Federal Reserve increases deposits at financial institutions by $90 billion through its open market operations. If the reserve requirement for all deposits is increased from 8% to 10% at the same time the Fed increases deposits, what is the maximum impact the Fed's actions can have on total deposits? Round your answer to the nearest billion. (Note: Enter only the number, in billions, of the increase. Example: If your calculated number is $300 billion, simply enter the number 300).

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