If the reserve requirement is 10, and a depositor withdraws 1,000 from a bank, the bank's excess reserves will change by:
a. -1,000
b. +1,000
c. -100
d. -900
e. +900
Question 2 - Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and net nonreserve-related international borrowing/lending in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period rises, and net nonreserve-related international borrowing/lending becomes more negative (or less positive).
b. There is not enough information to determine what happens to these two macroeconomic variables.
c. The quantity of real loanable funds per time period falls, and net nonreserve-related international borrowing/lending becomes more positive (or less negative).
d. The quantity of real loanable funds per time period and net nonreserve-related international borrowing/lending remain the same.
e. The quantity of real loanable funds per time period rises, and net nonreserve-related international borrowing/lending becomes more positive (or less negative).
Question 3 - Answer the following question based on the information given below: Deposits at the central bank = 400 U.S. Government Securities = 600 Checking Deposit = 1,700 Loans = 800 Stockholder's Equity = 70 Other Assets = 450 Other Liabilities = 380 Borrowing from the central bank = 250 Cash in the Vault = 150 If the reserve requirement is 20, the level of excess reserves equals:
a. 210
b. 440
c. 70
d. 550
e. Cannot be determined with this information.
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