Reading 24: Money, the Price Level, and Inflation LOS e习题精

On January 5, the U.S. Federal Reserve (the Fed) bought $10,000,000 of U.S. Treasury securities in the open market. At the time, the reserve requirement was 25%, and all banks had zero excess reserves. What is the potential impact of the Fed's purchase on the U.S. money supply?

At a recent conference, Joe DiSanto and Michael Depasquale were discussing a recent Federal Reserve policy shift that led to an increase in banks’ excess reserves. They each offered an explanation as to why this would cause an increase in bank loans and investments:

DiSanto: “Banks are required by law to expand the number of loans they originate when the Fed creates excess reserves.”

Depasquale: “It is risky to hold excess reserves, whereas loans and investments are less risky.”

Are DiSanto and Depasquale’s statements CORRECT?

On January 3, Logan Industries deposited $1,000,000 in cash at Federal Savings Bank. No excess reserves were present at the time Logan made the deposit and the required reserve ratio is 10%. What is the maximum amount by which Federal Savings Bank can increase its lending?

When additional or excess reserves are injected into the U.S. banking system, the money supply can potentially increase by an amount equal to the additional excess reserves multiplied by which of the following?