Question 32 (2 points) Suppose that in a simple deposit expansion model, the reserve ratio (r) is equal to 0.1. Which of

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Question 32 2 Points Suppose That In A Simple Deposit Expansion Model The Reserve Ratio R Is Equal To 0 1 Which Of 1 (69.82 KiB) Viewed 34 times

Question 32 (2 points) Suppose that in a simple deposit expansion model, the reserve ratio (r) is equal to 0.1. Which of the following statements is true? An increase in reserves of $1000 will lead to a decrease in demand deposits of $10,000. There is no relationship between demand deposits and reserves in this model. An increase in reserves of $1000 will lead to an increase in demand deposits of $10,000. An increase in reserves of $10,000 will lead to an increase in demand deposits of An increase in demand deposits of $1000 will lead to an increase in reserves of $10,000. Question 33 (4 points) What is the revolving door and why is it significant in financial markets? Question 34 (2 points) What is the Gap for a bank? Gap assets - net worth Gap = Rate-sensitive liabilities - rate-sensitive assets Gap = liabilities + net worth Gap transaction deposits - non-transaction deposits Gap rate-sensitive assets - rate-sensitive liabilities