1.If a bank has $100,000 in demand deposits and $30,000 on reserve with a 20 percent reserve requirement, the bank

Group of answer choices

has legal reserves of $10,000

has required reserves of $10,000

has excess reserves of $10,000

had requires reserves of $30,000

2.Which of the following could expand the money supply?

Group of answer choices

an increase in the required reserve ratio

an individual's cash withdrawal from a bank

an individual's purchase of a bond from the Fed

a decrease in the required reserve ratio

3.If the commercial banking system's excess reserves are zero and the reserve requirement is 10 percent, in order for the banking system to increase deposits by $2.5 million, the Fed must

Group of answer choices

permit the system to have prolonged reserve deficiencies

sell $250,000 of government securities to the general public

sell $2.5 million of government securities to the general public

buy $250,000 of government securities from the public.

4.If the legal reserve requirement is raised, the money multiplier

Group of answer choices

is doubled

is lowered

stays the same

is increased

5.Assume that required reserves are 20 percent. If the Fed buys $1,000 worth of bonds from a member bank, then the banking system can

Group of answer choices

decrease loans by a maximum of $5,000

increase loans by a maximum of $5,000

decrease loans by a maximum of $4,000

increase loans by a maximum of $4,000.

6.The initial impact of the Fed's open market sale of government securities to commercial banks is

Group of answer choices

an increase in commercial bank deposits at the Fed.

an increase in the money supply by some multiple of the dollar volume of the sale.

a fall in the money supply some multiple of the dollar volume of the sale.

a reduction of the commercial banking systems reserve deposits at the Fed.

7.The goal of a gold standard is to

Group of answer choices

return money back to its natural state

reduce uncertainty by limiting power of the Federal Reserve to increase the amount of money in circulation

shift wealth from the middle class to the rich

conserve on natural resources, such as pulpwood, used to make paper money

8.When a commercial bank borrows directly from the Fed, it pays

Group of answer choices

an interest rate called the federal funds rate

the Fed in a mutually agreed upon quantity of gold reserves in its vaults

a zero rate of interest

an interest rate called the discount rate.