How Banks Create Money

the total amount of cash the bank has in its vault

• excess reserves

• required reserves

• actual reserves

• army reserves

The Fed determines the amount of cash a bank must keep in its vault by raising or lowering the?

• reserve ratio (requirement)

• discount rate

• fed funds rate

• open market operations

The amount of money the bank has available to lend

• excess reserves

• required reserves

• actual reserves

• navy reserves

The (fill in the blank) is the percentage of bank deposits that the bank must keep in its vault

• actual ratio

• reserve ratio

• spending mutliplier

• fifteen percent rule

deposits are 100,000, RR=10%, no loans have been made, how much money does the bank have available to lend?

• 80,000

• 60,000

• 10,000

• 90,000

RR=10%, deposits are 50,000. What are the required reserves?

• 8,000

• 500

• 5,000

• 50,000

Deposits made by bank customers are also known as?

• 'That bread'

• money in the bank, baby!

• hard cheddar

• checkable deposits

Actual Reserves minus Required Reserves equals

• required reserves

• actual reserves

• reservations

• excess reserves

The money or banking multiplier is found by ?

• 1 divided by RR

• 1 divided by MPS

• 1 divided by NBC

• 1 divided by RT

To find the money creating potential of the ENTIRE banking system, we multiply?

• banking multiplier times MPS

• banking multiplier times actual reserves

• banking multiplier times excess reserves

• banking multiplier times required reserves