Suppose all banks have zero excess reserves. The Fed buys bonds for $1 million and a bond dealer deposits the check in his or her bank. The required reserve rati is 15 percent. The bank loans out the maximum it is allowed to a local business. The business writes a check for the full amount for supplies, which is then deposited in another bank. The largest loan the second bank can make is: The largest loan the second bank can make is $. (Round your answer to the nearest dollar.)

Suppose all banks have zero excess reserves. The Fed buys bonds for $1 million and a bond dealer deposits the check in his or her bank. The required reserve rati is 15 percent. The bank loans out the maximum it is allowed to a local business. The business writes a check for the full amount for supplies, which is then deposited in another bank. The largest loan the second bank can make is: The largest loan the second bank can make is $. (Round your answer to the nearest dollar.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Suppose all banks have zero excess reserves. The Fed buys bonds for $1 million and a bond dealer deposits the check in his or her bank. The required reserve ratio is 8 percent. The bank loans out the maximum it is allowed to a local business. The business writes a check for the full amount for supplies, which is then deposited in another bank. The largest loan the second bank can make is: The largest loan the second bank can make is $. (Round your answer to the nearest dollar.)
"Banks make a profit by paying depositors a high rate to attract funds and making loans at a low rate to encourage borrowing." Is the previous statement correct or not?
I'd like help on b,c,d
If the Federal Reserve increases the discount rate from 14 percent to 16 percent banks will borrow Multiple Choice fewer reserves from the Fed and lending will increase. fewer reserves from the Fed and lending will decrease. more reserves from the Fed and lending will increase. more reserves from the Fed and lending will decrease.
The balance sheet for the newly formed ACME Bank is shown below. Reserves listed on the balance sheet are reserves on deposit at the Federal Reserve. Cash is vault cash held in the bank. Instructions: Enter your answers as a whole number. a. Fill in the missing value in the balance sheet. b. If the reserve requirement is 12 percent, how much in excess reserves is the bank holding? $
#27. Reserve requirements are regulations concerning a the interest rate at which banks can borrow from the Fed. b the amount banks are allowed to borrow from the Fed. c the amount of reserves banks must hold against deposits. d reserves banks must hold based on the number and type of loans they make.
Part 2 hand written plzz The Federal Reserve sells $26.00 million in Treasury securities. If the required reserve ratio is 10.00%, and all currency is deposited into the banking system, and banks hold excess reserves of 10%, then the maximum amount the money supply can decrease is $ million. (Insert your answer in millions, and round your answer to two decimal places.)
Why and when was the Federal Reserve created? 1) The Fed was created by the New Deal in 1934 to supervise national investment in publIc works 2) The Fed was created in 1913 in order to supervise banks and to control the money supply. 3) The Fed was created by John Quincy Adams in 1829, abolished by Andrew Jackson in 1831, and reconstituted by Theodore Roosevelt in 1909 as the official national bank tt the guarantor and the obligor for all commercial (not investment) banks 4) None of the above
Give me type answer i will rate
Use the following information to answer the questions: Suppose the Texans Bank has total deposit of $2,769, and the required reserve ratio of 6 percent. The current total reserve for the bank is $438. What is the excess reserve for this bank? [Hint: enter your answer in 2 decimal places)
Suppose that a bank does the following: a. Sets a loan rate on a prospective loan with BR = 8.04% and ϕ = 4.15%. b. Charges a 0.26 percent loan origination fee to the borrower. c. Imposes a 14 percent compensating balance requirement to be held as noninterest-bearing demand deposits. d. Holds reserve requirements of 9 percent imposed by the Federal Reserve on the bank’s demand deposits. Calculate the bank’s ROA on this loan. Note: Convert your answer to percentage format. Enter your answer rounded to 2 decimals, and without any units. So, for example, if your answer is 3.4568%, then just enter 3.46.
Part 8 says reserves: number Part 9 says loans: number