Consider again the same economy with two banks: Bank One and Bank Two. Partial balance sheet information
Question:
Consider again the same economy with two banks: Bank One and Bank Two. Partial balance sheet information for each is given below: Bank One: $120,000 demand deposits $15,000 total reserves on hand $30,000 equity Bank Two: $3000 Deposit in the Fed $10,000 total reserves on hand $8000 US government bonds $80,000 demand deposits In addition to the above information, members of the public hold $15,000 in cash, and the central bank requires that banks hold 10% of checking as required reserves (as in all class examples). Calculate the desired excess reserves ratio for the whole economy. Round your answer to three decimal places; do not convert to percent. In other words, if you get 0.999, enter only 0.999 in the blank.
Financial Accounting Tools for business decision making
ISBN: 978-0470534779
6th Edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso