John deposits $3,000 into his checking account. If the reserve ratio is 15%, what are the required and excess reserves?Required reserves: $ Excess reserves: $ keep a portion of it and lend out the rest. keep every penny as vault cash since itis such a small amount. lend out every penny since almost all transactions are digital.

It's crucial to determine the reserve ratio before figuring out the necessary reserves. The…

Answered: John deposits $3,000 into his checking…

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter14: Money And Banking

Section: Chapter Questions

Problem 8AA

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Find the required reserve if the excess reserve is $600 and the actual reserve is $100
Views on electronic money, or e-money, and digital cash
Mr. Bill Smith lives in Dayton Ohio and always deposits money into a checking account in a bank nearby. Please calculate the money creation in the U.S. banking system with required reserve ratio at 0.25 in each of the following cases: (a) Bill’s parents wired him $100,000 from Germany. (b) Bill won $100,000 cash from a casino in another state. (c) Bill found $100,000 worth of collectable coins underground at his house. (d) Bill got a $100,000 check which is issued in a U.S. bank from his aunt as gift.
Debit cards allow an individual to transfer funds directly in a checkable account to a merchant without writing a check. How is this different from the way credit cards work? Are either credit cards or debit cards money? Explain.
An advantage that money has over other assets is that it: a. Provides a higher return to the owner b. Is a safer asset to hold during times of inflation c. Increases in value over time d. Has lower transaction costs to use as a means of payment than other assets
First National Bank Liabilities and Net Worth Assets US Treasury Bonds $450,000 Net Worth $500,000 Reserves (Cash) $175,000 Checkable Deposits $250,000 Loans $125,000 Second National Bank Assets Liabilities and Net Worth US Treasury Bonds $100,000 Net Worth $250,000 Reserves (Cash) $250,000 Checkable Deposits $100,000 Third National Bank Assets Liabilities and Net Worth US Treasury Bonds $900,000 Net Worth $1,000,000 Reserves (Cash) $350,000 Checkable Deposits $500,000 Loans $250,000 The Required Reserve Ratio is 25% for all banks. Rob, who banks at Third National, writes a check in the amount of $100,000 to Darrin, a First National customer, who deposits the check in-full into his checking account. List which balance sheet entries at each bank change and what their new values are.
First National Bank Assets Liabilities and Net Worth US Treasury Bonds $450,000 Net Worth $500,000 Reserves (Cash) $175,000 Checkable Deposits $250,000 Loans $125,000 Second National Bank Assets Liabilities and Net Worth US Treasury Bonds $100,000 Net Worth $250,000 Reserves (Cash) $250,000 Checkable Deposits $100,000 Third National Bank Liabilities and Net Worth Assets US Treasury Bonds $900,000 Net Worth $1,000,000 Reserves (Cash) $350,000 Checkable Deposits $500,000 Loans $250,000 The required reserve ratio is 25% for all banks. Second National Bank is capable of loaning $ (Do NOT enter the '$' in your response. Enter a whole dollar amount; do NOT enter cents.) to its customers. Blank 1
What is the primary function of money. Explain in detail . No plagiarism allowed. Thankyou
First National Bank Assets Liabilities and Net Worth US Treasury Bonds $450,000 Net Worth $500,000 Reserves (Cash) $175,000 Checkable Deposits $250,000 Loans $125,000 Second National Bank Assets Liabilities and Net Worth US Treasury Bonds $100,000 Net Worth $250,000 Reserves (Cash) $250,000 Checkable Deposits $100,000 Third National Bank Assets Liabilities and Net Worth US Treasury Bonds $900,000 Net Worth $1,000,000 Reserves (Cash) $350,000 Checkable Deposits $500,000 Loans $250,000 The required reserve ratio is 25% for all banks. Second National Bank is capable of loaning $____________ (Do NOT enter the '$' in your response. Enter a whole dollar amount; do NOT enter cents.) to its customers.
First National Bank Assets Liabilities and Net Worth US Treasury Bonds $450,000 Net Worth $500,000 Reserves (Cash) $175,000 Checkable Deposits $250,000 Loans $125,000 Second National Bank Assets Liabilities and Net Worth US Treasury Bonds $100,000 Net Worth $250,000 Reserves (Cash) $250,000 Checkable Deposits $100,000 Third National Bank Assets Liabilities and Net Worth US Treasury Bonds $900,000 Net Worth $1,000,000 Reserves (Cash) $350,000 Checkable Deposits $500,000 Loans $250,000The Required Reserve Ratio is 25% for all banks. Assuming that all the customers that have outstanding loans have used all of those additional funds to invest in new machinery for their businesses (therefore, the amount of Checkable Deposits is the true liability the bank has to its customers), then $_____________ is the resulting change to the loan creating potential of the whole system (these three banks) as a result of Second National Bank customers depositing an additional $400,000 in their Checkable…
Give explanation as well please.
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