Suppose again that checkable deposits started off as $400,000 in First Main Street Bank, the required reserve ratio (r) is 25%, with and there are no excess reserves and no cash leakage. Suppose the Fed buys $6,000 worth of government securities from First Main Street Bank Complete the following table to reflect the Fed's purchase on the balance sheet for First Main Street Bank. Assets Liabilities Reserves $300,000 Checkable Deposits $400,000 Loans Does First Main Street Bank have any excess reserves now? Yes; the bank has $1,500 in excess reserves. No; the bank has zero excess reserves.
Suppose again that checkable deposits started off as $400,000 in First Main Street Bank, the required reserve ratio (r) is 25%, with and there are no excess reserves and no cash leakage. Suppose the Fed buys $6,000 worth of government securities from First Main Street Bank Complete the following table to reflect the Fed's purchase on the balance sheet for First Main Street Bank. Assets Liabilities Reserves $300,000 Checkable Deposits $400,000 Loans Does First Main Street Bank have any excess reserves now? Yes; the bank has $1,500 in excess reserves. No; the bank has zero excess reserves.
Chapter13: The Federal Reserve System
Section: Chapter Questions
Problem 10WNG
Related questions
Question
None
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
Economics: Private and Public Choice (MindTap Cou…
Economics
ISBN:
9781305506725
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Macroeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506756
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning