A bank has $113 million in total assets, which are composed of legal reserves, loans, and securities. Its only liabilities are $113 million in transactions deposits. The bank exactly satisfies its reserve requirement, and its total legal reserves equal $6 million. Calculate the required reserve ratio. %. (Enter your response rounded to the nearest integer.)

A bank has $113 million in total assets, which are composed of legal reserves, loans, and securities. Its only liabilities are $113 million in transactions deposits. The bank exactly satisfies its reserve requirement, and its total legal reserves equal $6 million. Calculate the required reserve ratio. %. (Enter your response rounded to the nearest integer.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Considering the following data (expressed in billions of U.S. dollars), calculate Ml and M2. Explain. Currency 1,050 Savings deposits 5,500 Small-denomination time deposits 1,000 Traveler’s checks outside banks and thrifts 10 Total money market mutual funds 800 Institution-only money market mutual funds 1,800 Transactions deposits 1,140
Suppose that the required reserve ratio is 10%. The table below shows the balance sheet (in millions of dollars) for (commercial) Bank INF: Assets Liabilities Loans 600 Deposits 1000 Bonds 200 Reserves 200 INF's excess reserves (in millions of dollars) equal O 100 200 400
Question 1. A bank has $140,000 in reserves, $1,600,000 in loans, and checkable deposits of $1,250,000. If the required reserve ratio is 10%, how are reserves split between required reserves and excess reserves?
Assuming that the cash held by the public drops to $5,000,000 with and equal amount becoming excess reserves and the required reserves ratio drops to 12 percent
If a bank currently has $10,000 Excess Reserves, $20,000 Required Reserves, and $30,000 Actual Reserves. What is the maximum amount of loans the bank could make? Multiple Choice $10,000 - up to its Excess Reserves $20,000 - up to its Required Reserves Under the above conditions, the bank could not make any additional loans $30,000 - up to its Actual Reserves
Suppose Southeast Mutual Bank, Walls Fergo Bank, and PJMorton Bank all have zero excess reserves. The required reserve ratio is presently set at 10%. Eric, a Southeast Mutual Bank customer, deposits $250,000 into his checking account at the local branch. Complete the following table to reflect any changes in Southeast Mutual Bank's T-account (before the bank makes any new loans). Assets Liabilities Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 10%. Hint: If the change is negative, be sure to enter the value as negative number. Amount Deposited Change in Excess Reserves Change in Required Reserves (Dollars) (Dollars) (Dollars) 250,000 Now, suppose Southeast Mutual Bank loans out all of its new excess reserves to Cho, who immediately uses the funds to write a check to Bob. Bob deposits the funds immediately into his checking…
Assess the banking sector from the perspective of the GDP of Canada
Name a reason why retail Money Market Mutual Funds are not included in M1 but demand deposits and other checkable deposits are. What specific role of money does this analysis (e.g. medium of exchange, standard of value, standard of deferred payments, store of value) pertain to?
Calculate M2 if :- M1 = $7500 million Saving deposit with post office Savings bank = $3300 million
Initial deposit is $10,000 Required Reserve Ratio is 20% Calculate: $ Multiplier Required Reserves Excess Reserves
Consider the following T-account for National City Bank: Assets Reserves $10,000 Loans $90,000 A) $10,000 If the required reserve ratio is lowered to 8 percent, how much can National City loan out? B) $8,000 C) $2,000 Liabilities D) $0 Deposits $100,000
37. Suppose that Second Republic Bank currently has $200,000 in demand deposits and $130,000 in outstanding loans. All remaining assets are in reserve. The Federal Reserve has set the reserve requirement at 10%. What is the value of this bank's reserve ratio (R)? (pick best answer) A) 15% B) 25% C) 35% D) 45% 2