Phil Frugal has been saving his pennies since he was 5 years old. He is now 45 and deposits his savings in a bank. His pennies total $5,000. Using this information and your knowledge of the banking system, select the best match for each item. Then calculate the values of reserves, required reserves, and excess reserves. Assume a required reserve ratio of 10%. Answer parts a. & b. a. The amount of reserves the bank owes to other banks: (Choose one of the 4 options) : required reserves, excess reserves, reserves or none of these The maximum amount of reserves available for loans: required reserves, excess reserves, reserves or none of these The amount of reserves the bank must set aside to loan to member banks: required reserves, excess reserves,reserves or none of these b. Enter the values of reserves, excess reserves, and required reserves. Reserves: $ Excess reserves: $ Required reserves: $
Phil Frugal has been saving his pennies since he was 5 years old. He is now 45 and deposits his savings in a bank. His pennies total $5,000. Using this information and your knowledge of the banking system, select the best match for each item. Then calculate the values of reserves,
a. The amount of reserves the bank owes to other banks: (Choose one of the 4 options) : required reserves, excess reserves, reserves or none of these
The maximum amount of reserves available for loans: required reserves, excess reserves, reserves or none of these
The amount of reserves the bank must set aside to loan to member banks: required reserves, excess reserves,reserves or none of these
b. Enter the values of reserves, excess reserves, and required reserves.
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