Assume a target reserve ratio of 5%. A cheque for $45000 is drawn on an account in Bank B and deposited in a checking deposit in Bank A. Round your final answers to 2 decimal places, if necessary. Do not enter comma "," or dollar sign ($) while entering your answer. a. By how much have the excess reserves of Bank A increased? b. How much in the form of new loans is Bank A now able to extend to borrowers? c. By how much have reserves of Bank B decreased? d. By how much have excess reserves of Bank B decreased? e. By how much has the money supply increased?

Assume a target reserve ratio of 5%. A cheque for $45000 is drawn on an account in Bank B and deposited in a checking deposit in Bank A. Round your final answers to 2 decimal places, if necessary. Do not enter comma "," or dollar sign ($) while entering your answer. a. By how much have the excess reserves of Bank A increased? b. How much in the form of new loans is Bank A now able to extend to borrowers? c. By how much have reserves of Bank B decreased? d. By how much have excess reserves of Bank B decreased? e. By how much has the money supply increased?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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