A bank holds $5 for every $100 in deposits. The bank wants to hold $3 for every $100 in deposits. The bank holds excess reserves of $12,000 and actual reserves of $17,000. What is the actual reserve ratio, the desired reserve ratio, and the desired reserves? >> Answer to 2 decimal places. The actual reserve ratio is The desired reserve ratio is The desired reserves are $

A bank holds $5 for every $100 in deposits. The bank wants to hold $3 for every $100 in deposits. The bank holds excess reserves of $12,000 and actual reserves of $17,000. What is the actual reserve ratio, the desired reserve ratio, and the desired reserves? >> Answer to 2 decimal places. The actual reserve ratio is The desired reserve ratio is The desired reserves are $

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter14: Banking And The Money Supply

Section: Chapter Questions

Problem 2.3P

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A bank holds $10 for every $100 in deposits. The bank wants to hold $9 for every $100 in deposits. The bank holds actual reserves of $22,000 and desired reserves of $13,000. What is the actual reserve ratio, the desired reserve ratio, and the excess reserves? >>> Answer to 2 decimal places. The actual reserve ratio is The desired reserve ratio is The excess reserves are $
Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 20%. Hint: If the change is negative, be sure to enter the value as negative number. Amount Deposited Change in Excess Reserves Change in Required Reserves (Dollars) (Dollars) (Dollars) 750,000 Now, suppose First Main Street Bank loans out all of its new excess reserves to Kate, who immediately uses the funds to write a check to Hubert. Hubert deposits the funds immediately into his checking account at Second Republic Bank. Then Second Republic Bank lends out all of its new excess reserves to Shen, who writes a check to Poornima, who deposits the money into her account at Third Fidelity Bank. Third Fidelity lends out all of its new excess reserves to Valerie in turn. Fill in the following table to show the effect of this ongoing chain of events at each bank. Enter each answer to the nearest dollar. Increase in Deposits Increase in Required Reserves…
7. The money creation process Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 5%. The Federal Reserve buys a government bond worth $200,000 from Sean, a client of First Main Street Bank. He deposits the money into his checking account at First Main Street Bank. Complete the following table to reflect any changes in First Main Street Bank's T-account (before the bank makes any new loans). Assets Liabilities
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A bank holds $7 for every $100 in deposits. The bank wants to hold $6 for every $100 in deposits. The bank holds desired reserves of $6,000 and excess reserves of $4,000. What is the actual reserve ratio, the desired reserve ratio, and the actual reserves? >>> Answer to 2 decimal places. The actual reserve ratio is The desired reserve ratio is The actual reserves are $
a) Suppose that Tk.10,000 in new taka bills (never seen before) falls magically from the sky into your hands. What are the minimum increase and the maximum increase in the money supply that may result? Assume the required reserve ratio is 10 percent.b) Suppose you receive Tk. 10,000 from your grandmother and deposits the money in a saving account. your grandmother gave you the money by writing a check on her saving account. Would the maximum increase in the money supply still be what you found it to be in part a) where you received the money from the sky? Why or why not?c) Suppose that instead you getting Tk. 10,000 from the sky or a check through your grandmother, you get the money from your mother who had buried it in a can in her backyard. In this case, would the maximum increase in the money supply be what you found it to be in part a)? Why or why not?
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