(16 points) A bank has $50,000 in deposits and has $3,400 in reserves. a) What is...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
(16 points) A bank has $50,000 in deposits and has $3,400 in reserves. a) What is its reserve ratio if the bank holds no excess reserves? b) If the Fed sets reserve ratio as 5 percent, what is the excess reserve? c) What is the money multiplier if the reserve ratio is 12.5 percent? d) How much money the banking system will create if 10,000 dollars are deposited to this bank and the reserve ratio is 12.5 percent? (16 points) A bank has $50,000 in deposits and has $3,400 in reserves. a) What is its reserve ratio if the bank holds no excess reserves? b) If the Fed sets reserve ratio as 5 percent, what is the excess reserve? c) What is the money multiplier if the reserve ratio is 12.5 percent? d) How much money the banking system will create if 10,000 dollars are deposited to this bank and the reserve ratio is 12.5 percent?
Expert Answer:
Related Book For
Posted Date:
Students also viewed these accounting questions
-
If the bank you own has no excess reserves and a sound customer comes in asking for a loan, should you automatically turn the customer down, explaining that you dont have any excess reserves to lend...
-
If reserves in the banking system increase by $1 billion as a result of discount loans of $1 billion and checkable deposits increase by $9 billion, why isn't the banking system in equilibrium? What...
-
What would the money multiplier be if the required reserve ratio were 5 percent? _____________ 10 percent? _____________ 20 percent? _____________ 25 percent? _____________ 50 percent? _____________
-
Write a structured flowchart for prob.2.3
-
From a logistical perspective, what are some of the differences between online and in-store retailing?
-
Imagine that there are three major network-affiliate television stations in Turlock, California: RBC, CBC, and MBC. All three stations have the op- tion of airing the evening network news program...
-
Create a simple WBS for planning a wedding.
-
Irresistible Art produces collectible pieces of art. The company's Raw Material Inventory account includes the costs of both direct and indirect materials. Account balances for the company at the...
-
Company X has monthly fixed costs of $ 5 0 , 0 0 0 and a unit variable cost of $ 5 0 . How many units do they have to sell at $ 1 0 0 to break even?
-
Consolidation related simulation example: Millennium Capital Management, Inc., (MCM) acquired a 90% interest in NextGen, Inc. MCM's Financial Manager, Matthew Steven, has prepared a draft memo to the...
-
1)How should electric field lines be drawn close to a point charge? 2)True or false: the points where the potential is the same in 3-D space lie on a surface.
-
Use the model of efficient cartel operation to explain why the University of Wisconsin receives a greater portion of bowl revenue than Utah State University.
-
What offense would a person who destroyed or damaged data in someones computer have committed? If a person electronically accessed anothers computer without permission, would this constitute a...
-
Should the NCAA be exempt from the antitrust laws? Why or why not?
-
What provisions would you include in a model statute making arson a crime? Would you provide for separate degrees of the offense?
-
The Supreme Court has created a good-faith exception to the exclusionary rule where police rely on a search warrant that is later held to be invalid because the magistrate erred in finding probable...
-
Information provided below will be used to provide a numerical answer in this question box and also a written explanation in the next question. You will be required to submit your work for this...
-
Why do markets typically lead to an efficient outcome for buyers and sellers?
-
The price of a bushel of wheat, which was $3.00 last month, is $3.70 today. The demand curve for wheat must have shifted rightward between last month and today. Discuss.
-
Explain the link between the Mexican demand for U.S. goods and the supply of pesos. Next, explain the link between the U.S. demand for Mexican goods and the supply of dollars.
-
The price to drive on a freeway is $0 at all times of the day. This price establishes equilibrium at 3 a.m., but is too low to establish equilibrium at 5 p.m. There is a shortage of freeway space at...
-
What does it mean to say that the demand for resources is a derived demand? Is the demand for all goods and services a derived demand?
-
Using the data in exercise 2, determine how many units of resources the firm will want to acquire. Data from in exercise 2 Using the information in the following table, calculate the marginal revenue...
-
Using the information in the following table, calculate the marginal revenue product (MRP = MPP MR). Unit of Resources Total Resource Output Price Price 1 10 $5 $10 2 25 $5 $10 345 35 $5 $10 40 $5...
Study smarter with the SolutionInn App