Assume that P100 in cash is used to open a new checking account in Bank of the Philippines, that Bank of the Philippines holds the P100 as vault cash, and prior to the deposit, National Bank was meeting the reserve requirement of 25% but had no excess reserves. As a result of the deposit, Bank of the Philippines's reserves

increase by P25.

increase by P100.

increase by P400.

increase by P75.

Consider the situation described above. The banking system as a whole can now expand money supply by a maximum of _____

P25.

P75.

P100.

P400.

If the reserve requirement is 15% and that a new checking deposits was received by a bank amounting to a total of P200,000 in the current year. The bank's balance sheet will have the following entries:

Liabilities: Increase by P200,000 Required Reserves: Increase by P170,000

Liabilities: Increase by P200,000 Required Reserves: Increase by P30,000 guess guess ak lang sukatan u

Liabilities: Increase by P200,000 Required Reserves: Not change

Liabilities: Decrease by P200,000 Required Reserves: Decrease by P30,000

If the reserve requirement is 10% and a commercial bank receives a deposit worth P10,000 from a new client and that the commercial bank has no excess reserves, the value of new loans this single bank can issue is

P100,000

P10,000

P1,000

P9,000

When BSP wants money to become "easy" it can

sell dollars to banks or to the public causing money supply to fall thereby discouraging spending in the economy.

purchase dollars from banks or from the public causing money supply to increase, thus inducing spending in the economy 2

increase rediscounting rate so more banks can borrow allowing more funds to circulate in the economy to induce spending.

increase reserve requirement increasing multiplier, thus money supply increases.

Assume that there is P1 million increase in new reserves in the banking system, further, the reserve requirement is 20%. If the banks freely keep their excess reserves, what happens to the increase in new reserves in the banking system?

Money supply will increase by less than P5,000,000.

Money supply will decrease by more than P5,000,000.

Money supply will increase by P5,000,000.

Money supply will increase by P800,000

A reserve requirement of 10%

implies a money multiplier of 1.

decreases for a bank as it acquires a greater monetary value of demand deposits.

implies a money multiplier of 10.

implies a smaller multiplier than would a 25% reserve requirement.

Consider the following balance sheet of a bank and assume that the bank's securities are not sold and the reserve requirement is 12%, what is the highest amount of additional loans can this bank undertake?

A MS1 MS2 MSz MS1 12 12 11 MD MD Q1 Q1ASSETS LIABILITIES & NET WORTH Reserves P150,000 Checkable Deposits P1,000,000 Securities 700,000 Loan 150,000