The ________ the amount of excess reserves a bank holds, the ________ the size of the deposit multiplier.  smaller; smaller   greater; larger Correct!  greater; smaller   smaller; greater likelihood there is no change in

The ________ the amount of excess reserves a bank holds, the ________ the size of the deposit multiplier.

Suppose a bank has $10,000 in deposits and $1,000 in reserves. The required reserve ratio is 5%. Which of the following occurs if the required reserve ratio is increased to 10%?Question 48Select one:a.The bank's required reserves will decrease to $500.b.The bank's excess reserves will increase to $1,000.c.The bank's required reserves will increase to $1,000.d.The bank's ability to create loans increases by 5%.

The actual change in the money supply as a result of an increase in excess reserves will be less than the maximum change if banksGroup of answer choicesdo not lend out all of their excess reservesborrow from the Federal Reservesell some of their government securities to the Federal Reservelend only their excess reserves

Which of the following changes would be the mostlikely to reduce the size of the money multiplier?a. a decrease in the required reserve ratiob. a decrease in excess reservesc. an increase in cash holding by consumersd. a decrease in bank runse. an increase in deposit insurance

When $1 million is deposited at a bank, the required reserve ratio is 20 percent, and thebank chooses not to hold any excess reserves but makes loans instead, then, in the bank'sfinal balance sheetA) the assets at the bank increase by $800,000.B) the liabilities of the bank increase by $1,000,000.C) the liabilities of the bank increase by $800,000.D) reserves increase by $160,000.