Thursday, February 1, 2018

Ch 14. Assignment: Due Friday, 2/2

You should complete this assignment while you are in class today to avoid homework.  I am at Challenge Day in the gym all day today.  Chapter 14 is a difficult and tedious chapter to read, so please try to focus on the specific topics I have highlighted and not get lost in the banking transactions.






1.  Compare early banking (the goldsmiths) to modern banking (fractional reserve banking). 




2.  Define/describe each:
a.  Required Reserves
b.  Excess Reserves
c.  Total Reserves




3.  What is the Reserve Requirement (also called the required reserve ratio)?  Why was it created and by whom?


4.  Define:
a.  asset
b.  liability




5.  Create a list of banking transactions which count as assets and liabilities for a bank.




6.  What is the money multiplier?  Describe it in general terms and provide a formula.







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