MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
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Question
Chapter 15, Problem 2SQP
To determine
Rise in
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Students have asked these similar questions
You just deposited $4,000 in cash into a checking account at the local bank. Assume that banks lend out all excess reserves
and there are no leaks in the banking system. That is, all money lent by banks gets deposited in the banking system. Round
your answers to the nearest dollar.
If the reserve requirement is 20%, how much will your
deposit increase the total value of checkable bank deposits?
If the reserve requirement is 8%, how much will your deposit
increase the total value of checkable deposits?
Increasing the reserve requirement
decreases
the
money supply.
%24
%24
Jane deposits $175 into her bank, and the reserve requirement is 15 percent. How much is the excess reserve in dollars
If you deposit a $20 bill into a checking account and you bank has a 10% reserve requirement, by how much will the banks excess reserves rise?
Chapter 15 Solutions
MACROECONOMICS FOR TODAY
Ch. 15.3 - Prob. 1YTECh. 15 - Prob. 1SQPCh. 15 - Prob. 2SQPCh. 15 - Prob. 3SQPCh. 15 - Prob. 4SQPCh. 15 - Prob. 5SQPCh. 15 - Prob. 6SQPCh. 15 - Prob. 7SQPCh. 15 - Prob. 8SQPCh. 15 - Prob. 9SQP
Ch. 15 - Prob. 10SQPCh. 15 - Prob. 11SQPCh. 15 - Prob. 1SQCh. 15 - Prob. 2SQCh. 15 - Prob. 3SQCh. 15 - Prob. 4SQCh. 15 - Prob. 5SQCh. 15 - Prob. 6SQCh. 15 - Prob. 7SQCh. 15 - Prob. 8SQCh. 15 - Prob. 9SQCh. 15 - Prob. 10SQCh. 15 - Prob. 11SQCh. 15 - Prob. 12SQCh. 15 - Prob. 13SQCh. 15 - Prob. 14SQCh. 15 - Prob. 15SQCh. 15 - Prob. 16SQCh. 15 - Prob. 17SQCh. 15 - Prob. 18SQCh. 15 - Prob. 19SQCh. 15 - Prob. 20SQ
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Similar questions
- Why does the Federal Reserve require commercial banks to have reserves?arrow_forwardHow is a bank able to lend more money than it has in reserves?arrow_forwardIf you deposit $40 into a checking account, and your bank has a 10% reserve requirement, the bank's excess reserves will rise by $arrow_forward
- How is the amount of reserves banks hold related to the amount of money the banking system creates?arrow_forwardIf the required reserve ratio is 10 percent and a bank has $1,000 of deposits, then its required reserves are?arrow_forwardIf the reserve ratio is 5% and a bank receives a new deposit of $500, what will the bank do?arrow_forward
- Suppose the banking system does NOT hold excess reserves and the reserve ratio is 20%. If Sam deposits $500 cash into his checking account, how much can the banking system can increase the money supply by?arrow_forwardAre commercial bank savings accounts part of the monetary reserve?arrow_forwardThe First National Bank of Townville has $125,000 in U.S. government securities, $200,000 in savings accounts, $300,000 in checking accounts, $50,000 in its reserve account at the Fed, $10,000 of currency in its vault, and loans of $250,000. What is the amount of its reserves? Show your calculations.arrow_forward
- Why don’t banks hold 100 percent reserves? How is the amount of reserves banks hold related to the amount of money the banking system creates?arrow_forwardYou deposit a $1,000 scholarship check in the bank. If the required reserve ratio is 10 percent, explain how the banking system will create new money and how much money can potentially be created.arrow_forwardThe manager of the bank where you work tells you that the bank has $100 million in deposits and $22 million dollars in loans. If the reserve requirement is 8 percent, how much is the bank holding in excess reserves?arrow_forward
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