Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Question
Chapter 27, Problem 7SPPA
To determine
To calculate:
The bank's desired reserve ratio.
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Third National Bank has reserves of $20,000 and checkable deposits of $100,000. The reserve ratio is 20 percent.
Households deposit $20,000 in currency into the bank, and the bank adds that currency to its reserves. What amount
of excess reserves does the bank now have?
Instructions: Enter your answer as a whole number.
2$
Third National Bank has reserves of $20,000 and checkable deposits of $100,000. The reserve ratio is 20 percent. Households deposit $20,000 in currency into the bank and that currency is added to reserves.
Instructions: Enter your answer as a whole number.
What level of excess reserves does the bank now have?
Third National Bank has reserves of $ 20,000 and checkable deposits of $ 100,000. The reserve ratio is 20%. Households deposit $ 5,000 in currency into the bank and that currency is added to reserves.
What level of excess reserves does the bank now have?
Chapter 27 Solutions
Foundations of Economics (8th Edition)
Ch. 27 - Prob. 1SPPACh. 27 - Prob. 2SPPACh. 27 - Prob. 3SPPACh. 27 - Prob. 4SPPACh. 27 - Prob. 5SPPACh. 27 - Prob. 6SPPACh. 27 - Prob. 7SPPACh. 27 - Prob. 8SPPACh. 27 - Prob. 9SPPACh. 27 - Prob. 10SPPA
Ch. 27 - Prob. 11SPPACh. 27 - Prob. 12SPPACh. 27 - Prob. 13SPPACh. 27 - Prob. 1IAPACh. 27 - Prob. 2IAPACh. 27 - Prob. 3IAPACh. 27 - Prob. 4IAPACh. 27 - Prob. 5IAPACh. 27 - Prob. 6IAPACh. 27 - Prob. 7IAPACh. 27 - Prob. 8IAPACh. 27 - Prob. 9IAPACh. 27 - Prob. 10IAPACh. 27 - Prob. 11IAPACh. 27 - Prob. 1MCQCh. 27 - Prob. 2MCQCh. 27 - Prob. 3MCQCh. 27 - Prob. 4MCQCh. 27 - Prob. 5MCQCh. 27 - Prob. 6MCQCh. 27 - Prob. 7MCQCh. 27 - Prob. 8MCQ
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- You take $500 that you held as currency and put it into the banking system. The reserve ratio is equal to 20%. 1. Calculate the money multiplier. 2. By how much will increase the total amount of deposits in the banking system? 3. By how much will increase the money supply?arrow_forwardThe Third National Bank has reserves of $20,000 and checkable deposits of $100,000. The reserve ratio is 20 percent. Households deposit $5000 in currency into the bank that is added to reserves. What level of excess reserves does the bank now have?arrow_forwardA bank's reserve ratio is 8 percent and the bank has $1,000 in deposits. Its reserves amount toarrow_forward
- Third National Bank has reserves of $10,000 and checkable deposits of $100,000. The reserve ratio is 10 percent. Households deposit $10,000 in currency into a checking account at the bank and that currency is added to reserves.What level of excess reserves does the bank now have? $arrow_forwardOn a bank's T-account, deposits are assets, reserves are liabilities Select one: True Falsearrow_forwardYour friend Sarah borrows money from her bank to buy a car. Explain to her the transactions in which the bank sets up the loan, and why the loan involves an increase in the money supply.arrow_forward
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