Fisher 201 09 – To reach the maximum money multiplier, it is assumed that
To reach the maximum money multiplier, it is assumed thata. loans are diverted into circulating currency.b. there is insufficient loan demand.c. commercial banks keep the amount of reserves. equal to total bank deposits.d. all loans get redeposited in a checkable account.The reserve ratio is 10 percent. If the bank receives a customer deposit of $100,000, then an immediate effect isa. no change in the bank’s total assets or total liabilities.b. a reduction in the bank’s total assets of exactly $10,000.c. a reduction in the bank’s total liabilities of exactly $10,000.d. an increase in the bank’s reserves of exactly $10,000.The primary purpose of the FDIC is to reduce the potential fora. bank runs.b. reserve cheating.c. government regulations.d. excessive interest rates.The function of money that allows individuals a method to compare the relative value of goods and services isa. store of value.b. medium of exchange.c. liquidity.d. unit of accounting.