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For the first eight questions on this assignment, consider an economy that has only two banks, Bank One and Bank Two. Partial balance sheet information for each is given below: • Bank One: o $120,000 demand deposits o $15,000 total reserves on hand o $30,000 equity

For the first eight questions on this assignment, consider an economy that has only two banks, Bank One and Bank Two. Partial balance sheet information for each is given below: • Bank One: o $120,000 demand deposits o $15,000 total reserves on hand o $30,000 equity

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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For the first eight questions on this assignment, consider an economy that has only two banks, Bank One and Bank Two. Partial balance sheet information for each is given below: • Bank One: o $120,000 demand deposits o $15,000 total reserves on hand o $30,000 equity • Bank Two: o $3800 Deposit in the Fed O $10,000 total reserves on hand o $8000 US government bonds o $80,000 demand deposits In addition to the above information, members of the public hold $15,000 in cash, and the central bank requires that banks hold 10% of checking as required reserves (as in all class examples). Calculate the currency ratio for this whole economy. Round your answer to three decimal places. Do not turn your answer into a percent; in other words, if you get 0.999, enter only 0.999 in the blank.
Transcribed Image Text:For the first eight questions on this assignment, consider an economy that has only two banks, Bank One and Bank Two. Partial balance sheet information for each is given below: • Bank One: o $120,000 demand deposits o $15,000 total reserves on hand o $30,000 equity • Bank Two: o $3800 Deposit in the Fed O $10,000 total reserves on hand o $8000 US government bonds o $80,000 demand deposits In addition to the above information, members of the public hold $15,000 in cash, and the central bank requires that banks hold 10% of checking as required reserves (as in all class examples). Calculate the currency ratio for this whole economy. Round your answer to three decimal places. Do not turn your answer into a percent; in other words, if you get 0.999, enter only 0.999 in the blank.
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Calculate the desired excess reserves ratio for the whole economy. 

 

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