New Bank Balance Sheet Assets Liability and Equity Required Reserves: $ 0.30 million Deposits: $ 1.50 million Excess Reserves: $ 1.90 million Equity: $ 1.50 million Government Bonds: $ 0.80 million   To correct this situation, we can sell $0.10 million in government bonds to Typical Bank.  When we sell $0.10 million in government bonds to Typical Bank, what is the (new) value of Typical Bank's excess reserves on hand? ______ Million

ECON MACRO
5th Edition
ISBN:9781337000529
Author:William A. McEachern
Publisher:William A. McEachern
Chapter14: Banking And The Money Supply
Section: Chapter Questions
Problem 2.3P
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New Bank Balance Sheet

Assets
Liability and Equity
Required Reserves: $ 0.30 million
Deposits: $ 1.50 million
Excess Reserves: $ 1.90 million
Equity: $ 1.50 million
Government Bonds: $ 0.80 million
 

To correct this situation, we can sell $0.10 million in government bonds to Typical Bank. 

When we sell $0.10 million in government bonds to Typical Bank, what is the (new) value of Typical Bank's excess reserves on hand?

______ Million

 

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