Economics Today and Tomorrow, Student Edition
1st Edition
ISBN: 9780078747663
Author: McGraw-Hill
Publisher: Glencoe/McGraw-Hill School Pub Co
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Question
Chapter 15, Problem 13AA
To determine
To find:The reason for banks keep money in reserve accounts.
Expert Solution & Answer
Explanation of Solution
Fed has set
It is not said that the banks have to keep 100 percent of their deposits in reserve. The amount maintained in reserves by banks can be used to create new money. The portion of reserves that is not required can be used by banks to provide loans to other businesses or individuals, this is multiple expansion of money supply.
Economics Concept Introduction
Introduction:
Reserve requirements-Federal Reserve has set regulations for reserve requirements by which banks are required to maintain a specific percentage of their checkable deposits as cash with them. This amount can also be maintained as deposits in the Federal Reserve district banks.
Chapter 15 Solutions
Economics Today and Tomorrow, Student Edition
Ch. 15.1 - Prob. 1RCh. 15.1 - Prob. 2RCh. 15.1 - Prob. 3RCh. 15.1 - Prob. 4RCh. 15.2 - Prob. 1RCh. 15.2 - Prob. 2RCh. 15.2 - Prob. 3RCh. 15.2 - Prob. 4RCh. 15.2 - Prob. 5RCh. 15.3 - Prob. 1R
Ch. 15.3 - Prob. 2RCh. 15.3 - Prob. 3RCh. 15.3 - Prob. 4RCh. 15.3 - Prob. 5RCh. 15 - Prob. 1AACh. 15 - Prob. 2AACh. 15 - Prob. 3AACh. 15 - Prob. 4AACh. 15 - Prob. 5AACh. 15 - Prob. 6AACh. 15 - Prob. 7AACh. 15 - Prob. 8AACh. 15 - Prob. 9AACh. 15 - Prob. 10AACh. 15 - Prob. 11AACh. 15 - Prob. 12AACh. 15 - Prob. 13AACh. 15 - Prob. 14AACh. 15 - Prob. 15AACh. 15 - Prob. 17AACh. 15 - Prob. 18AACh. 15 - Prob. 19AACh. 15 - Prob. 20AA
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