The following net transaction accounts have been documented by a bank for the computation of its reserve requirements (in millions). Net transaction accounts Tuesday Wednesday Thursday Friday Monday Tuesday Wednesday Thursday Frid 11th 14th 17th 18th $290 $310 $330 12th 13th 19th 20th 211 $330 $280 $310 $300 $290 $28 The average daily reserves at the Fed for the 14-day reserve maintenance period have been $26.5 million per day, and the average vault cash for the computation period has been estimated to be $1 million per day. a. What is the amount of the average daily required reserves to be held by the bank during the maintenance period? (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places. (e.g., 32.161)) Average daily required reserves million

The following net transaction accounts have been documented by a bank for the computation of its reserve requirements (in millions). Net transaction accounts Tuesday Wednesday Thursday Friday Monday Tuesday Wednesday Thursday Frid 11th 14th 17th 18th $290 $310 $330 12th 13th 19th 20th 211 $330 $280 $310 $300 $290 $28 The average daily reserves at the Fed for the 14-day reserve maintenance period have been $26.5 million per day, and the average vault cash for the computation period has been estimated to be $1 million per day. a. What is the amount of the average daily required reserves to be held by the bank during the maintenance period? (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places. (e.g., 32.161)) Average daily required reserves million

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

16
The chartered banking system in Canada plays a crucial role in expanding or contracting the money supply as dictated by the monetary policy of the Bank of Canada. If excess reserves in the Canadian chartered banking system are $4,000, demand deposits are $40,000, and the desired reserve ratio is 10 percent, then actual cash reserves: Multiple Choice are $8,000. are $4,000. are $6,000. cannot be determined from this information. are $10,000.
The central bank buys $10,000 worth of bonds in the open market from Elaine, who deposits the proceeds in her checking account at MSM Bank. The required reserve ratio is 5%. (a) What is the amount by which MSM Bank’s liabilities have changed? Explain. (b) Calculate the change in required reserves for MSM Bank. Show your work. (c) What is the dollar value of the maximum amount of new loans MSM Bank can initially make as a result of Elaine’s deposit? Explain. (d) Based on the central bank’s open-market purchase of bonds, calculate the maximum amount by which the money supply can change throughout the banking system. Show your work. (e) How will the change in the money supply in part (d) affect aggregate demand and the price level in the short run? Explain.
Suppose the Fed buys $2000000 in government securities from someone who is a depositor at the First National Bank of El Reno. Lets assume the person deposits this money in this bank. Further assume that the current reserve requirement ratio is 20%. Please indicate below what will initially happen to this bank's balance sheet as a result of this transaction. Change in Reserves Change in loans Change in deposits Please indicate what will eventually happen to the nation's banking system as a result of this transaction. Change in reserves Change in loans Change in Deposits
When $100 is deposited in the banking system, it leads to maximum expansion in bank deposits of $1,000. What is the required reserve ratio assuming that the excess reserves are 0 Question 7 options: 10% 5% 0% 20%
Don't provide handwritten solution.