Bance Solida has, in the past, always operated with a reserve ratio of 25 percent. It has now been taken over by Gung-Ho Bank Which operates with a reserve ration of 12½ percent, Assuming that Banca Solida adopts the business practices of its new owner, What will be the effect on money supply in the country in which Banca Solida operates ?

Related Mcqs:

The difference between a bank’s actual reserves and its required reserves is its?

A. required reserve ratio B. profit margin C. excess reserves D. net worth...

A bank has excess reserves to lend but is unable to find anyone to borrow the money This will _________ the size of the money multiplier?

A. reduce B. have no effect on C. increase D. double...

Three variables affect the demand for money they are _______ and __________?

A. bank opening hours, the proportion of weekly paid employee’s interest rates B. the price level interest rates real income C. The time of year bank opening hours the price level D. The proportion of weekly paid employees the time of year real income...

When economies speak of the demand for money which of the following are they asking ?

A. How much cash do you wish you could have? B. How much wealth would you like? C. How much income would you like to earn? D. What proportion of your financial assets do you want to hold in non-interest-bearing forms...

Money has 3 main function they are __________ and __________?

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