EBK ECONOMICS
EBK ECONOMICS
13th Edition
ISBN: 8220106798607
Author: Arnold
Publisher: CENGAGE L
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Chapter 12, Problem 8WNG
To determine

The required reserve.

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John deposits $1,600 into his checking account. If the reserve ratio is 5%, what are the required and excess reserves? Required reserves: $ Excess reserves: $
Draw a simple T-account for First National Bank of Me, which has $9000 of deposits, a reserve ratio of 10 percent, and excess reserves of $300.
John deposits $3,000 into his checking account. If the reserve ratio is 15%, what are the required and excess reserves? Required reserves: $ Excess reserves: $ keep a portion of it and lend out the rest. keep every penny as vault cash since it is such a small amount. lend out every penny since almost all transactions are digital.
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