Suppose Imtiaz moves his Rs1,000 demand deposit from Bank A to Bank B. If both banks operate with a reserve ratio of 10 percent What is the potential change in money supply as a result of Gerard’s action ?

Related Mcqs:

The refinancing rate is ?

A. The interest rate at Which commercial banks lend to and borrow from each other B. The interest rate the European Central Bank pays on reserves C. The interest rates the public pays when borrowing from banks D. The interest rates the European Central Bank charges on loans to banks E. He interests rate banks … The refinancing rate is ?Read More...

The opportunity cost of holding money is determined by ?

A. the discount rates B. the level of aggregate output C. the interest rates D. the inflation rates...

Commodity money ?

A. has no intrinsic value B. has intrinsic value C. is used exclusively in the economies of western Europe and north America D. is used as reserves to back fiat money...

Assume that commercial banks are holding excess reserves because business firms and consumers are not willing to borrow money A decrease in the discount rate is likely to ?

A. increase the money supply because it is now cheaper for banks to borrow from the central bank B. decrease the money supply because it will now be more expensive for business firms and consumers to borrow money C. Not change the money supply because banks already have excess reserves they cannot lend D. Decrease … Assume that commercial banks are holding excess reserves because business firms and consumers are not willing to borrow money A decrease in the discount...

If the central bank buys financial securities in the open market to increase the monetary base, this is and example of ?

A. lender of less resort B. financial intermediation C. Open Market operations D. Financial regulation...