A banking system has deposits of $1000, loans of $800, and reserves of $200. The central bank has just raised the reserve ratio to 0.25. Imagine loans are paid back with deposits. Calculate the value of loans the banks could recall to comply with this change in the reserve ratio. Do not include a dollar sign ($) in your answer and round all money answers to 2 decimal places, if required.

A banking system has deposits of $1000, loans of $800, and reserves of $200. The central bank has just raised the reserve ratio to 0.25. Imagine loans are paid back with deposits. Calculate the value of loans the banks could recall to comply with this change in the reserve ratio. Do not include a dollar sign ($) in your answer and round all money answers to 2 decimal places, if required.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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