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Which of the following statements regarding goldsmiths evolutionary use of fractional reserve banking are correct

Which of the following statements regarding goldsmiths’ evolutionary use of fractional reserve banking are correct? Check all that apply. Goldsmiths invented open market operations. Goldsmith receipts became paper money. Goldsmiths made loans for more gold than the amount of gold deposited. Goldsmiths invented excess reserves.

#9

Assume the required reserve ratio is 20%, and a bank’s excess reserves are $50 million.

Which of the following accurately explain why checkable deposits resulting from new loans based on excess reserves are not likely to generate the maximum of $50 million×5=$250 million$50 million×5=$250 million? Check all that apply.

Banks not using all their excess reserves to make loans reduces the value of the money multiplier.

Cash leakage increases the value of the money multiplier.

Banks not using all their excess reserves to make loans increases the value of the money multiplier.

Cash leakage reduces the value of the money multiplier.

#11

Which of the following are problems faced by the Fed in controlling the money supply? Check all that apply.

An inside lag

The price shock

The uncertain value of the money multiplier

The income lag

Feb 01 2020 View more View Less

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