Pound Bank is currently fully "loaned up." If the required liquidity ratio is lowered, A) Pound Bank will still be loaned up because it did not receive any additional deposits. B) Pound Bank's actual liquidity will increase, but it will still be fully loaned up. C) Pound Bank will have excess liquidity on which it can make additional loans that it can lend out. D) Pound Bank's capital will increase. The value by which total deposits can increase for every pound increase in reserves is the A) credit limit. B) liquidity ratio. C) money multiplier. D) none of the above. When a bank has no excess liquidity, and thus can make no more advances, it can be said to be A) loaned up B) ripe for takeover C) bankrupt D) in receivership Which of the following activities is one of the responsibilities of the Bank of England? A) ensuring that there is sufficient liquidity in the financial system B) administration of the indirect taxation system C) advising on income tax rates D) auditing central and local government accounts The Home Loan Bank has $40 million in deposits and is fully loaned up. The liquidity ratio is increased. The Home Loan Bank finds that A) it has insufficient liquid assets on hand. B) it's capital decreases. C) it must lower the interest rate that it charges on loans. D) it now has excess liquid assets to lend. The banking system has deposits of $100 million and no excess liquidity. The liquidity ratio is reduced from 25% to 20%. If there are no leakages from the banking system, the banking system A) could make additional loans up to $5 million. B) could make additional loans up to $20 million. C) could not make any additional loans because it has not received any new deposits. D) could make additional loans up to $25 million. The central bank of the United Kingdom is known as A) the money market. B) the Treasury. C) the Bank of England. D) Lloyds Which of the following activities is NOT one of the responsibilities of the Bank of England? A) clearing interbank payments. B) administering the tax system. C) regulating the banking system. D) managing exchange rates. Banks till money + Banks operational deposits at the Bank of England = A) M2 B) MO C) NIBM1 D) None of these