For all the questions below select the appropriate answer:

1: balance sheet or T~account Liabilities and Net Worth Total Reserves $100 000 Deposits Loans The table presented shows the consolidated position of a simple national banking system. Assume individuals in this country hold no cash and the banks' desired reserve ratio is 10 per cent. Then after the banking system adjusts to achieve its desired reserve ratio, its total deposit liabilities and reserve assets will be: 0 deposits = $1,000,000; reserves = $100,000. 0 deposits = reserves = $100,000 0 deposits = $200,000; reserves = $20,000. 0 deposits = $1,000,000; reserves = $1,000,000. b) If the banks' desired reserve ratio (rr) is 2.5% and the public's currency ratio (or) is 7.5% an increase in monetary base (MB) of $1 ,000 will result in: O a decrease in deposits of $1,000 and an increase of $1,000 in the public's cash holdings. 0 an increase in deposits of $100 and an increase of $75 in the public's cash holdings. 0 an increase in deposits of $10,000 and an increase of $750 in the public's cash holdings. O a decrease in deposits of $10,000 and an increase of $7,500 in the public's cash holdings. c) If a commercial bank receives a new cash deposit of $1 ,000 and operates with an 8 per cent reserve ratio: 0 the bank's reserve position is not affected because both deposits and cash reserves change by the same amount. 0 the bank has excess reserves of $1,000. 0 the bank can expand its lending and deposits by $920. 0 the bank has a shortage of reserves of $80. d) A commercial bank's ability to expand its lending and deposits depends on: O the bank's excess reserve holdings and government policy toward banks. 0 the public's current deposit holdings and willingness to borrow from the bank. 0 the bank's excess reserve holdings and the public's willingness to borrow from the bank and use bank deposits as money. 0 the current prots earned by the bank and bank customer satisfaction. e) The cash balances held by commercial banks are: 0 bank reserves. 0 loans available to bank customers who wish to borrow. 0 customer saving and chequing accounts. 0 equal to recent deposits made by new bank customers