Consider again the same economy with two banks: Bank One and Bank Two. Partial balance sheet information for each is given below: Bank One: $120,000 demand deposits $15,000 total reserves on hand $30,000 equity Bank Two: $3000 Deposit in the Fed $10,000 total reserves on hand $8000 US government bonds $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).

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Consider again the same economy with two banks: Bank One and Bank Two. Partial balance sheet information for each is given below:

  • Bank One:
    • $120,000 demand deposits
    • $15,000 total reserves on hand
    • $30,000 equity
  • Bank Two:
    • $3000 Deposit in the Fed
    • $10,000 total reserves on hand
    • $8000 US government bonds
    • $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 amount of cash held within Bank Two. 

 
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