Consider an individual who moves to Canada and brings with him his life savings of $60,000, which he deposits in a Canadian bank. For each of the cases below, compute the overall change in deposits and reserves in the Canadian banking system as a result of this new deposit. a. 10 percent target reserve ratio; 4 percent cash drain; 6 percent excess reserves: Overall change in deposits = $. Overall change reserves = $. (Round your responses to the nearest dollar.) b. 16 percent target reserve ratio; 5 percent cash drain; 5 percent excess reserves: Overall change in deposits $. Overall change reserves = $ (Round your responses to the nearest dollar.)
Consider an individual who moves to Canada and brings with him his life savings of $60,000, which he deposits in a Canadian bank. For each of the cases below, compute the overall change in deposits and reserves in the Canadian banking system as a result of this new deposit. a. 10 percent target reserve ratio; 4 percent cash drain; 6 percent excess reserves: Overall change in deposits = $. Overall change reserves = $. (Round your responses to the nearest dollar.) b. 16 percent target reserve ratio; 5 percent cash drain; 5 percent excess reserves: Overall change in deposits $. Overall change reserves = $ (Round your responses to the nearest dollar.)
Chapter13: The Federal Reserve System
Section: Chapter Questions
Problem 10WNG
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Transcribed Image Text:Consider an individual who moves to Canada and brings with him his life savings of $60,000, which he deposits in a Canadian bank. For each of the cases below, compute the overall change in deposits and reserves in the Canadian banking
system as a result of this new deposit.
a. 10 percent target reserve ratio; 4 percent cash drain; 6 percent excess reserves:
Overall change in deposits = $ . Overall change in reserves = $
(Round your responses to the nearest dollar.)
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b. 16 percent target reserve ratio; 5 percent cash drain; 5 percent excess reserves:
Overall change in deposits = $
Overall change in reserves = $
(Round your responses to the nearest dollar.)
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