Third National Bank has reserves of $20,000 and checkable deposits of $100,000. The reserve ratio is 20 percent. Households deposit $20,0000 in currency into the bank, and the bank adds that currency to its reserves. What amount of excess reserves does the bank now have? Instructions: Enter your answer as a whole number. 2$

Why are banks able to maintain reserves that are only a fraction of the demand and saving deposits of their customers?
Is your money safe in a bank? Why or why not?

Banking Question 2 Please use the balance sheet for Bank Alpha to answer the questions. Assume Bank Alpha loans all of its excess reserves, and the assets and liabilities balance on the balance sheet. Show all work. Bank Alpha a. Required Reserves C. Loans e. Assets X $27,000.00 How much is X, the dollar amount of reserves? b. How much is the required reserve ratio? How much is the M? m Checking Deposits Saving Deposits Liabilities $5,000.00 Assume Bank Alpha loans its excess reserves to Bank Beta. Next Bank Beta loans their excess reserves to Bank Gamma. Please create balance sheets for Banks Beta and Gamma. Assume there are no excess reserves in this banking system. d. How much total money stock created in this banking system? What is the total of M1 for Bank Alpha? M2? $25,000.00

A commercial bank has actual reserves of $1 million and checkable-deposit liabilities of $9 million, and the required reserve ratio is 10 percent. The excess reserves of the bank are: Select one: a. $50,000 b. $100,000 c. $900,000  d. $1 million