The Creation of Money

The percentage of a deposit that a bank must hold on to is called the ______.

• Excess Reserve
• Interest Rate
• Credit
• Required Reserve

The percentage of a deposit that the bank may loan out or otherwise use to make profits.

• Excessive Reserves
• Credit
• Interest Rate
• Required Reserve

How much must the bank keep on hand if the Required Reserve is 10%  and there is a deposit of $100.

• 100
• 110
• 90
• 10

What is the Excess Reserve if the Required Reserve is 50% and there is a deposit of $200.

• 50
• 100
• 250
• 400

How much money must the bank keep on hand if the Required Reserve is 20% and there is a deposit of $1000.

• 20
• 50
• 200
• 1020

If the Excess Reserve is $400, the bank ______ loan out $400.

• may
• must

What is the Money Multiplier if the Required Reserve is 10%?

• 1
• 10
• 100
• 1000

What is the Money Multiplier if the Required Reserve is 50%?

• 20
• 2
• 100
• 0.5

What is the Money Multiplier if the Required Reserve is 20%?

• 20
• 40
• 50
• 5

If the Money Multiplier is 5 and there is an initial deposit of $1,000, what is the maximum amount of deposits created?

• 200
• 500
• 5000
• 1005