Amount of the bank reserve requirement

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Reference no: EM131531159

Question 1: Suppose a hypothetical bank had a 5 percent reserve requirement. Consider a bank with loans of $500, equity of $100, deposits of $500, investments of $400, and short-term debt of $200. What is the amount of the bank's reserve requirement?

a. $25

b. $500

c. $0

d. $50 

Question 2: Suppose that nominal GDP is $5,000 and the velocity of money is equal to 5. According to the quantity theory of money, what is the amount of money in circulation?

a. $1,000

b. $100

c. $5,000

d. $500

Question 3: The wholesale price of one pound of coffee was 8.25 cents in 1900 and $1.50 in 2015. If the CPI was 3.43 for 1900 and 100 for 2015, coffee was

a. more expensive in 2015 compared to 1900.

b. less expensive in 1900 compared to 2015.

c. less expensive in 2015 compared to 1900.

d. as expensive in 2015 as it was in 1900. 

Question 4: Consider a bank with loans of $500, equity of $100, deposits of $500, investments of $400, cash and reserves of $50, and short-term debt of $200. How much long-term debt does this bank have?

a. $350

b. $150

c. $50

d. $200

Reference no: EM131531159

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