Macroeconomics (Book Only)
12th Edition
ISBN: 9781285738314
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 12, Problem 9WNG
To determine
The reserves.
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John deposits $1,600 into his checking account. If the reserve ratio is 5%, what are the
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Chapter 12 Solutions
Macroeconomics (Book Only)
Ch. 12.2 - Prob. 1STCh. 12.2 - Prob. 2STCh. 12.2 - Prob. 3STCh. 12.3 - Prob. 1STCh. 12.3 - Prob. 2STCh. 12.3 - Prob. 3STCh. 12.4 - Prob. 1STCh. 12.4 - Prob. 2STCh. 12.4 - Prob. 3STCh. 12 - Prob. 1VQP
Ch. 12 - Prob. 2VQPCh. 12 - Prob. 3VQPCh. 12 - Prob. 4VQPCh. 12 - Prob. 5VQPCh. 12 - How much money did you make last year? What is...Ch. 12 - Prob. 2QPCh. 12 - Prob. 3QPCh. 12 - Prob. 4QPCh. 12 - Prob. 5QPCh. 12 - Prob. 6QPCh. 12 - Prob. 7QPCh. 12 - Prob. 8QPCh. 12 - Prob. 9QPCh. 12 - Prob. 10QPCh. 12 - Prob. 11QPCh. 12 - Prob. 12QPCh. 12 - Prob. 13QPCh. 12 - Prob. 14QPCh. 12 - Prob. 15QPCh. 12 - Prob. 16QPCh. 12 - Prob. 17QPCh. 12 - Prob. 1WNGCh. 12 - Prob. 2WNGCh. 12 - Prob. 3WNGCh. 12 - Prob. 4WNGCh. 12 - Prob. 5WNGCh. 12 - Prob. 6WNGCh. 12 - Prob. 7WNGCh. 12 - Prob. 8WNGCh. 12 - Prob. 9WNGCh. 12 - Prob. 10WNG
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- The First National Bank of Townville has $125,000 in U.S. government securities, $200,000 in savings accounts, $300,000 in checking accounts, $50,000 in its reserve account at the Fed, $10,000 of currency in its vault, and loans of $250,000. What is the amount of its reserves? Show your calculations.arrow_forwardRequired reserves in Bank two should be 10% of $80,000 demand deposits which equals 8,000. Correct?arrow_forwardWhat entity decides what the reserve requirement is? arrow_forward
- Why can banks continue to hold reserves that are only a fraction of the demand deposits of their customers? Is your money safe in a bank? Why or why not?arrow_forwardDraw 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.arrow_forwardJohn 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.arrow_forward
- A bank has $30,000 in deposits and has $5,400 in reserves. What is its reserve ratio?arrow_forwardYou just deposited $4,000 in cash into a checking account at the local bank. Assume that banks lend out all excess reserves and there are no leaks in the banking system. That is, all money lent by banks gets deposited in the banking system. Round your answers to the nearest dollar. If the reserve requirement is 20%, how much will your deposit increase the total value of checkable bank deposits? If the reserve requirement is 8%, how much will your deposit increase the total value of checkable deposits? Increasing the reserve requirement decreases the money supply. %24 %24arrow_forwardI'm doing economics homework and the question is asking; If a bank has $150 million in deposits and $25 million in reserves with a reserve requirement of 0.15 how much are its required reserves. I thought I was supposed to multiply the reserve requirement with the total deposits, but its telling me my answer is incorrect. What am I doing wrong?arrow_forward
- If you deposit $40 into a checking account, and your bank has a 10% reserve requirement, the bank's excess reserves will rise by $arrow_forwardA bank has $25 million in deposits and maintains a reserve ratio of 0.2. What are its total reserves in millions of dollars?arrow_forwardExcess reserves are insurance from deposit outflow. Suppose you hold 15 million required reserves and 45 million excess reserves at the central bank. The total interest payment on reserves from the central bank is 0.3%. If you do not hold your excess reserves at the bank, you may take loans and earn 4% in average. What is the cost of holding excess reserve at the central bank?arrow_forward
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