For this bank what would be the level of excess reserves if the required reserve ratio were 20%?A) 0B) $300,000C) $900,000D) $1,000,000E) There would be a shortfall in required reserves of $100,000 LAST CHANCE BANK OF TOMBSTONE BALANCE SHEETLIABILITIES &ASSETScash in the vault:deposits at FedUS treasury bonds:loans:Building:TOTALS:0$300,000$900,000---O $1,000,000$700,000 demand deposits:$100,000$300,000$3,900,000$2,000,000$7,000,000 TOTALS:For this bank what would be the level of excess reserves if the required reserve ratio were 20%?capital stock:NET WORTH$4,000,000O There would be a shortfall in required reserves of $100,000$3,000,000$7,000,000

Bank reserves are the cash minimum requirements required by financial institutions to meet central…

For this bank what would be the level of excess reserves if the required reserve ratio were 20%? A) 0 B) $300,000 C) $900,000 D) $1,000,000 E) There would be a shortfall in required reserves of $100,000

For this bank what would be the level of excess reserves if the required reserve ratio were 20%? A) 0 B) $300,000 C) $900,000 D) $1,000,000 E) There would be a shortfall in required reserves of $100,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

For this bank what would be the level of excess reserves if the required reserve ratio were 20%?

A) 0

B) $300,000

C) $900,000

D) $1,000,000

E) There would be a shortfall in required reserves of $100,000

LAST CHANCE BANK OF TOMBSTONE BALANCE SHEET
LIABILITIES &
ASSETS
cash in the vault:
deposits at Fed
US treasury bonds:
loans:
Building:
TOTALS:
0
$300,000
$900,000
---
O $1,000,000
$700,000 demand deposits:
$100,000
$300,000
$3,900,000
$2,000,000
$7,000,000 TOTALS:
For this bank what would be the level of excess reserves if the required reserve ratio were 20%?
capital stock:
NET WORTH
$4,000,000
O There would be a shortfall in required reserves of $100,000
$3,000,000
$7,000,000

Definition Definition Minimum amount that a commercial bank must hold in liquid assets in order to fulfill central bank regulations.

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