Consider a central bank policy to maintain 9% reserves on deposits held by commercial banks. A bank,
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Consider a central bank policy to maintain 9% reserves on deposits held by commercial banks. A bank, ALFA, currently has $10 million in deposits and holds $1 million in reserves at the central bank. What is the excess reserve ratio? What will be the requirements if the bank is to add $500,000 additional deposits?
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The excess reserve ratio is the ratio of a banks excess reserves to its total deposits Excess reserv...View the full answer
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Related Book For 
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ISBN: 9781292215006
9th Global Edition
Authors: Stanley Eakins Frederic Mishkin
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