• Currency held outside banks $ 800 Demand Deposits 1000 Traveller’s Cheques 100 Other checkable deposits 200 Savings accounts 300 Money market accounts 100 Other near monies 200 a. What is the value of M1? [2 marks] b. What is the value of M2?
• The required reserve ratio is 10%. Dollar Bank has $500,000 in deposits and $100,000 in reserves. Assume all other commercial banks are loaned up.
• (a) What is the value of this bank's excess reserves?
• (b) What is the value of the additional loans that can be made by the commercial banking system?
• (c) What is the money multiplier?
• (d) How much in total deposits will be supported by Dollar Bank's reserves, if this bank lends all its excess reserves and there is no leakage from the banking system?

Answer rating: 100% (QA)

a What is the value of M1 Currency held outside banks demand deposit travellers check other checka... View the full answer