Assuming $2 billion in gold reserves at the Central Bank, if the Central Bank holds reserves of 20% and the commercial banking system holds reserves of 15%, what will be the ratio of gold reserves to commercial bank notes and deposits?

Assuming $3 billion in gold reserves, if the Central Bank holds reserves of 50% and the commercial banking system holds reserves of 10%, what will be the ratio of gold reserves to commercial bank notes and deposits?

Make the balance sheets of the Central Bank and the commercial banking system based on the numbers given in question.

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Answer For the first scenario Gold reserves 2 billion Reserve requirement of Central Bank 20 Reserve ... View the full answer