Question 7

1. Balance sheet of Bank National
   Assets		Liabilities
   Vault Cash Deposit in Fed Loans Total Assets	$1,500 $ 500 $4,000 $6,000	Deposits Total Liabilities	$6,000 $6,000

   If r = 10%, how much can the whole banking system expand the money supply?

   	a.	$20,000
   	b.	$54,000
   	c.	$40,000
   	d.	$11,000
   	e.	$5,000

Balance sheet of Bank National
Assets		Liabilities
Vault Cash Deposit in Fed Loans Total Assets	$1,500 $ 500 $4,000 $6,000	Deposits Total Liabilities	$6,000 $6,000

If the Fed changed the reserve requirement from 10% to 5% - the banks Excess Reserves (ER) would:

	a.	Increase by $300
	b.	Increase by $1,700
	c.	Decrease by $1,400
	d.	Increase by $2,000
	e.	Increase by $5,700

Question 9

1. Balance sheet of Bank National
   Assets		Liabilities
   Vault Cash Deposit in Fed Loans Total Assets	$1,500 $ 500 $4,000 $6,000	Deposits Total Liabilities	$6,000 $6,000

   If the Fed changed the reserve requirement from 10% to 25% the money supply (MS) in the whole banking system could:

   	a.	Decrease by $18,000
   	b.	Decrease by $54,000
   	c.	Increase by $18,000
   	d.	Decreases by $36,000
   	e.	Increase by $36,000

Question 9

1. Balance sheet of Bank National
   Assets		Liabilities
   Vault Cash Deposit in Fed Loans Total Assets	$1,500 $ 500 $4,000 $6,000	Deposits Total Liabilities	$6,000 $6,000

   If the Fed changed the reserve requirement from 10% to 25% the money supply (MS) in the whole banking system could:

   	a.	Decrease by $18,000
   	b.	Decrease by $54,000
   	c.	Increase by $18,000
   	d.	Decreases by $36,000
   	e.	Increase by $36,000

Question 10

1. Balance sheet of Bank National
   Assets		Liabilities
   Vault Cash Deposit in Fed Loans Total Assets	$1,500 $ 500 $4,000 $6,000	Deposits Total Liabilities	$6,000 $6,000

   If the Fed changed the reserve requirement from 10% to 39% Bank National would now have ER of:

   	a.	-$340
   	b.	-$3,660
   	c.	-$2,340
   	d.	-$500
   	e.	-$250