The table shows the commercial banks' balance sheet (aggregated over all the banks). The commercial banks' desired reserve ratio on all deposits is 10 percent and there is no currency drain. Calculate the bank's excess reserves. >>> Answer to 2 decimal places. Assets Liabilities (millions of dollars) 25425 Reserves at the Fed 25 Cash in vault Securities Loans Checkable deposits Savings deposits 40 120 The banks' excess reserves are $11 million. If the banks use all of these excess reserves to make loans, what is the quantity of loans? The quantity of loans will be $11 million. If the banks use all of the excess reserves to make loans, what is the quantity of total deposits immediately after the banks have made the loans? 120 70
The table shows the commercial banks' balance sheet (aggregated over all the banks). The commercial banks' desired reserve ratio on all deposits is 10 percent and there is no currency drain. Calculate the bank's excess reserves. >>> Answer to 2 decimal places. Assets Liabilities (millions of dollars) 25425 Reserves at the Fed 25 Cash in vault Securities Loans Checkable deposits Savings deposits 40 120 The banks' excess reserves are $11 million. If the banks use all of these excess reserves to make loans, what is the quantity of loans? The quantity of loans will be $11 million. If the banks use all of the excess reserves to make loans, what is the quantity of total deposits immediately after the banks have made the loans? 120 70
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![The table shows the commercial banks' balance
sheet (aggregated over all the banks). The
commercial banks' desired reserve ratio on all
deposits is 10 percent and there is no currency
drain.
Calculate the bank's excess reserves.
>>> Answer to 2 decimal places.
The banks' excess reserves are $11 million.
If the banks use all of these excess reserves to
make loans, what is the quantity of loans?
The quantity of loans will be $11 million.
If the banks use all of the excess reserves to
make loans, what is the quantity of total deposits
immediately after the banks have made
the loans?
The quantity of total deposits immediately after
the banks have made the loans is $ ☐ million.
Assets
Liabilities
(millions of dollars)
Reserves at the Fed 25
Checkable deposits
120
Cash in vault
Securities
Loans
5
Savings deposits
70
40
120](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff869381e-9625-4bee-b8b2-6ddcc51e59db%2Fd60e4287-aa3f-4a71-b501-2d243c1ea601%2Fjtcpfer_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The table shows the commercial banks' balance
sheet (aggregated over all the banks). The
commercial banks' desired reserve ratio on all
deposits is 10 percent and there is no currency
drain.
Calculate the bank's excess reserves.
>>> Answer to 2 decimal places.
The banks' excess reserves are $11 million.
If the banks use all of these excess reserves to
make loans, what is the quantity of loans?
The quantity of loans will be $11 million.
If the banks use all of the excess reserves to
make loans, what is the quantity of total deposits
immediately after the banks have made
the loans?
The quantity of total deposits immediately after
the banks have made the loans is $ ☐ million.
Assets
Liabilities
(millions of dollars)
Reserves at the Fed 25
Checkable deposits
120
Cash in vault
Securities
Loans
5
Savings deposits
70
40
120
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