Suppose again that Second National Bank has Reserves (Cash) of $25,000 and Demand Deposits of $100,000. The Required Reserve Ratio is 25%. The bank now sells $4,000 in US Treasury Bonds that the bank owns to the Federal Reserve (remember that the bank's balance sheet must remain in balance). How much Excess Reserves does Second National Bank now have?

Suppose again that Second National Bank has Reserves (Cash) of $25,000 and Demand Deposits of $100,000. The Required Reserve Ratio is 25%. The bank now sells $4,000 in US Treasury Bonds that the bank owns to the Federal Reserve (remember that the bank's balance sheet must remain in balance). How much Excess Reserves does Second National Bank now have?

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter19: Money Creation

Section: Chapter Questions

Problem 19SQ

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