The declining trend in the currency-deposit ratio during 2007-2014 can be explained by
A) the increased holdings of U.S. currency by foreigners.
B) bank panics.
C) a drop in the rate of interest paid on checking deposits.
D) the increasing use of debit cards.
D
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A majority of people in the United States have private health insurance
Indicate whether the statement is true or false
Refer to the given data. Suppose the Fed sold $10 billion of U.S. securities to the banks. This would:
Answer the question on the basis of the following consolidated balance sheet of the
commercial banking system. Assume that the reserve requirement is 10 percent. All figures
are in billions and each question should be answered independently of changes specified in
any preceding ones.
A. increase bank reserves to $70 billion, reduce bank-held securities to $130 billion, and
ultimately increase the money supply (checkable deposits) by $100 billion.
B. increase bank reserves to $70 billion, reduce bank-held securities to $130 billion, and
ultimately decrease the money supply (checkable deposits) by $100 billion.
C. reduce bank reserves to $50 billion, increase bank-held securities to $150 billion, and
ultimately increase the money supply (checkable deposits) by $100 billion.
D. reduce bank reserves to $50 billion, increase bank-held securities to $150 billion, and ultimately decrease the money supply (checkable deposits) by $100 billion.