ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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- 2arrow_forward2arrow_forward1. If the reserve ratio is 10%, a bank with $1,000 in deposits has required reserves of $ Type your answer here 2. If a bank is holding required reserves of $100 to support $500 in deposits, the reserve ratio is Type your answer here 3. If a bank with $500 in deposits is holding reserves of $50 when the reserve ratio is 10%, the bank has excess reserves of $ %. Type your answer herearrow_forward
- 25. Assume: a required reserve ratio of 5%, this bank is the only one with excess reserves, banks do not wish to hold excess reserves and the public does not wish to increase its cash holdings. What is the maximum amount of new money the banking system can create? a) $700,000 b) $400,000 c) $4,000,000 d) $5,000,000 e) $11,000,000arrow_forwardNote. Don't use Ai botarrow_forward1. The amount of funds that a bank chooses to keep on hand beyond what it is required to is called: excess reserves. excess deposits. federal funds. extra holdings. 2. Suppose Bank Y currently has $300M in demand deposits and $45M in reserves. Bank Xs reserve ratio is 10% 12% 15% None of the abovearrow_forward
- 7. The money creation process Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 10%. Hubert, a client of First Main Street Bank, deposits $500,000 into his checking account at First Main Street Bank. Complete the following table to reflect any changes in First Main Street 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) 500,000 Now, suppose First Main Street Bank loans out all of its new excess reserves to Eileen, who immediately uses the funds to write a check to Clancy. Clancy…arrow_forwardAnswer all parts... I ll upvotearrow_forwardTable 13.1: FIRST COMMERCIAL BANK Asset Liabilities Total Reserves: S150,000 s100,000 $1,000,000 $200,000 Deposits Net Worth Required Reserves Excess Reserves ? Loans $1,200,000 Total $1,200,000 Total 16. Refer to Table 13.1. First Commercial Bank's total loans equal $ a) 1,050,000 b) 1,200,000 c) 1,150,000 d) 1,250,000arrow_forward
- 6. Required and excess reserves Suppose that Second Republic Bank currently has $200,000 in demand deposits and $130,000 in outstanding loans. The Federal Reserve has set the reserve requirement at 10%. Second Republic Reserves Required Reserves Excess Reserves (Dollars) (Dollars) (Dollars)arrow_forward29. The required reserve ratio for the bank in Table A is A) 18 percent. B) 10 percent. C) 12 percent. D) 16 percent.arrow_forward-The Golden State Bank has total cash reserves of $110,000, deposits of $200,000, and loans of $90,000. The reserve requirement is 5 percent. This bank can make additional loans up to the amount of: $10,000 $5,500 $100,000 $190,000arrow_forward
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