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Banking System and Money Supply

Banking System and Money Supply

Assessment

Interactive Video

•

Mathematics, Business

•

10th - 12th Grade

•

Practice Problem

•

Medium

Created by

Ethan Morris

Used 6+ times

FREE Resource

The video tutorial explains the balance sheet of First Superior Bank, focusing on assets, liabilities, and equity. It discusses the reserve ratio and how it limits the bank's ability to issue new loans. The impact of new deposits on loan capacity is analyzed, followed by calculations of maximum changes in loans, demand deposits, and money supply. The tutorial concludes with factors that can cause actual changes in money supply to differ from theoretical calculations.

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10 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What are the total assets of First Superior Bank as mentioned in the balance sheet?

$2,200

$200

$2,000

$1,800

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the required reserve ratio for First Superior Bank?

15%

5%

20%

10%

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Why can't First Superior Bank make any new loans currently?

It has already loaned out 90% of its deposits.

It has excess reserves.

It has too much equity.

It has no demand deposits.

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

After Mr. Smith's deposit, how much can First Superior Bank loan out?

$110

$100

$10

$90

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the maximum change in loans over time in the banking system due to Mr. Smith's deposit?

$810

$900

$100

$1,000

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the maximum change in demand deposits over time due to Mr. Smith's deposit?

$100

$1,000

$810

$900

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the maximum change in the money supply due to Mr. Smith's deposit?

$900

$100

$810

$1,000

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