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The goldsmith's ability to create money was based on the fact that. When the receipts given by goldsmiths to depositors were used to make purchases. Most modern banking systems are based on. Which of the following statements is correct? A bank's liabilities plus its net worth equal its assets. If a bank has liabilities that exceed its net worth it.

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The claims of the owners of a firm against the firm's assets are called. Which of the following are all assets to a commercial bank? The reserves of a commercial bank consist of: The bank must have: Checkable deposits are also called. Banks create money when they: Excess reserves refer to the: Suppose the reserve requirement is 10 percent.

Suppose the reserve requirement is 20 percent. The resere requirement must be: The reserve ratio refers to the ratio of a bank's.

As a result of this transaction: A single commercial bank, Klein National Bank, must meet a 25 percent reserve requirement. When a commercial bank has excess reserves: Which of the following is correct?

Granting a bank loan creates money; repaying a bank loan destroys money. The amount of reserves that a commercial bank is required to hold is equal to: Actual reserves minus required reserves equal excess reserves.

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Refer to the above data. Refer to the data TABLE C. As a result, the bank's excess reserves diminish to: The legal reserve ratio applies to checkable deposits at: When commercial banks use excess reserves to buy government securities from the public: A bank temporarily short of required reserves may be able to remedy this situation by: The multiple by which the commercial banking system can expand the supply of money is equal to the reciprocal of: If D equals the maximum amount of new demand-deposit money that can be created by the banking system on the basis of any given amount of excess reserves; E equals the amount of excess reserves; and m is the monetary multiplier, then: If the reserve ratio is 15 percent and commercial bankers decide to hold additional excess reserves equal to 5 percent of any newly acquired checkable deposits, then the relevant monetary multiplier for the banking system will be: Other things equal, if the required reserve ratio was lowered.

If a portion of the loans extended by commercial banks is taken as cash rather than as checkable deposits, the maximum money-creating potential of the commercial banking system will: The commercial banking system has excess reserves of: The maximum amount by which the commercial banking system can expand the supply of money by lending is: If the commercial banking system actually loans the maximum amount it is able to lend: Given a 25 percent reserve ratio, assume the commercial banking system is loaned up.

Now assume the reserve ratio is reduced to 20 percent.

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As a result of this reduction: When the legal reserve ratio is 25 percent, the excess reserves of this single bank are: When the legal reserve ratio is 10 percent, the money creating potential of this single bank is: When the legal reserve ratio is 20 percent, the money creating potential of the entire banking system is: When the legal reserve ratio is 30 percent, the monetary multiplier is: If the legal reserve ratio falls from 25 percent to 10 percent, excess reserves of this single bank will: If the reserve ratio is percent, the value of the monetary multiplier is: Banks destroy money when they: Assume that the listed amounts constitute this bank's complete set of accounts.

If Moolah Bank is legally "loaned up," the reserve requirement must be: If Moolah Bank is legally "loaned up," the banking system's monetary multiplier must be: Assume that Moolah bank is "loaned up.

Last Word A "national bank holiday" that closed all banks for a week and resulted in Federal deposit insurance occurred in the United States in: