Try another version of these questions

Question 1

Suppose the Fed decreases required reserve ratio.

As a result of this policy, what will happen to the money supply?

 

Hint


Question 2

Suppose the Fed increses required reserve ratio.

As a result of this policy, what will happen to the money supply?

 

Hint


Question 3

Consider the following balance sheet for US Bank.

AssetsLiabilities
Reserves529Deposits2300
Loans1771

Suppose that someone deposited $400 at US Bank.

Given this data, what is the maximum amount by which the money supply will increase?

Hint