Suppose the Federal Reserve establishes a reserve requirement of 14 percent and the monetary multiplier is 7.14. How much will the money supply change if excess reserves increase by $400 million? Instructions: Round answers two decimal places. million LA a. ABC Bank has $180,000 of checkable deposits. If the Federal Reserve has a reserve requirement of 14 percent, what is the required reserves? $1 b. XYZ Bank has required reserves of $42,480 and excess reserves of $488,520, what is the amount of actual reserves?
Suppose the Federal Reserve establishes a reserve requirement of 14 percent and the monetary multiplier is 7.14. How much will the money supply change if excess reserves increase by $400 million? Instructions: Round answers two decimal places. million LA a. ABC Bank has $180,000 of checkable deposits. If the Federal Reserve has a reserve requirement of 14 percent, what is the required reserves? $1 b. XYZ Bank has required reserves of $42,480 and excess reserves of $488,520, what is the amount of actual reserves?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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