bank reserves

Project Description:

suppose that the reserve ratio is .25, and that a bank has actual reserves of $15,000, loans of $40,000, and demand deposits of $50,000.

a. excess reserves are $____________________.

b. this bank, being a single bank in a multibank system, can safely lend $____________________.

c. the multibank system can safely lend $__________________.

d. it is possible for the monetary base to increase by a total of $___________________. assume now that the fed lowers the reserve ratio to .20:

e. this bank, being a single bank in a multibank system, can now safely lend $_____________________.

f. the multibank system can safely lend $____________________.

g. it is now possible for the monetary base to increase by a total of $________________________.

h. the increase/decrease in the potential money supply because of the decrease in the required reserve ratio is $_____________________.
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Price Type: Negotiable

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