t cash or &R; deposit at a Federal Reserve Bank. in the T-account for a single b

Question

t cash or &R; deposit at a Federal Reserve Bank. in the T-account for a single bank to answer questions 3 -3: Assets Liabilities nk Reserves $50,000 Checkable Deposits $400,000 $350,000 Loans reserve ratio is 10%, then required reserves are equal to: $400,000. $40,000. $50,000. $60,000. a. b. c. d. If the required reserve ratio is 10%, then excess reserves are equal to: a. S0 b. $10,000. c. $15,000. d. $20,000 lf the required reserve ratio is 10% , then the maximum additional amount this bank can lend is 5 a. $0 b. $10,000. c. $15,000. d. $20,000. 211 Chapter 10 Assignments

Explanation / Answer

3)b) RRR = 10% , Checkable deposits = $400000 .

So Required reserves = 10% * 400000 = $40000

4)b) Excess reserves = $50000 - $40000 = $10000

5) b) maximum additional amount this bank can lend is $10000 is equal to excess reserve.

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