Suppose a bank has $2 million in deposits, a required reserve ratio of 20 percent, and reserves of $500,000. Then it has excess reserves of : A) $100,000 b) $200,000 c) $400,000 d) $300,000
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Suppose a bank has $2 million in deposits, a
A) $100,000
b) $200,000
c) $400,000
d) $300,000
Step by step
Solved in 3 steps with 5 images
- If the required reserve ratio is 5%, what is the level of excess reserves this bank holds? a) $900,000 b) $1,000,000 c) $750,000 d) $500,000 e) $400,000If a Bank accepts a deposit of $1,000 and the required reserve ratio is 20%, how much can the Bank lend to a potential borrower? A) $900 B) $800 C) $600 D) $400A bank has outstanding loans of $7,500, reserves of $2,500, and deposit liabilities of $10,000. If the required reserve ratio is 10%, this bank: A. Is holding excess reserves of $1,000 B. Is in a position to make a new loan for $1,500 C. Is in a position to make a new loan for $2,500 D. Has less reserves than required
- When a bank issues a loan to a customer: A) bank assets fall by the amount of the loan. B) the composition of bank assets changes so that bank reserves increase and the value of bank loans decreases. C) bank assets rise by the amount of the loan. D) the composition of bank assets changes so that bank reserves decrease and the value of bank loans increases.If a bank has total reserves of $175,000 and $1,000,000 in deposits, how much money can it lend if the required reserve ratio is 5%Question 35 If a bank has a required reserve ratio of 25% and there are $5,300,000 in deposits, what is amount of required reserves? $25,000 $280,000 $1,325,000 $2,275,000 $5,005,000
- When $1 million is deposited at a bank, the required reserve ratio is 20 percent, and the bank chooses not to hold any excess reserves but instead makes loans, then in the bank's final balance sheet. Choose form options A) the assets at the bank increase by $200,000. B) the liabilities of the bank increase by $200,000. C) reserves increase by $200,000. D) all of the above occur.Required reserves with a bank equal A) Total reserves plus excess reserves B) Excess reserves minus demand deposits C) Total reserves minues excess reserves D) Demand deposits plus savings accountBank of Sin City has $250 million in deposits. Bank of Sin City is meeting its reserve requirement and has no excess reserves. It has $10 million in reserves. Bank of Sin City faces a required reserve ratio ofa) 1.25%.b) 4%.c) 20%.d) 37.5%.
- If a bank has total reserves of $200,000 and $1 million in deposits, how much money can it lend if the required reserve ratio is (a) 4 percent? (b) 6 percent?If the required reserve ratio were 10%, how much of this bank's reserves would qualify as excess reserves? A) 200,000 B) 300,000 C) 400,000 D) 550,000 E) 3,000,000First National Bank Assets Liabilities and Net Worth US Treasury Bonds $450,000 Net Worth $500,000 Reserves (Cash) $175,000 Checkable Deposits $250,000 Loans $125,000 Second National Bank Assets Liabilities and Net Worth US Treasury Bonds $100,000 Net Worth $250,000 Reserves (Cash) $250,000 Checkable Deposits $100,000 Third National Bank Assets Liabilities and Net Worth US Treasury Bonds $900,000 Net Worth $1,000,000 Reserves (Cash) $350,000 Checkable Deposits $500,000 Loans $250,000 The required reserve ratio is 25% for all banks. Second National Bank is capable of loaning $____________ (Do NOT enter the '$' in your response. Enter a whole dollar amount; do NOT enter cents.) to its customers.
