NAME Print Last Name, First Name SECTION # DEPOSIT AND RESERVE CALCULATIONS Use
ID: 1110145 • Letter: N
Question
NAME Print Last Name, First Name SECTION # DEPOSIT AND RESERVE CALCULATIONS Use the simple deposit creation model to fill in blanks 1-10. Assume no leakages into cash, and that the only assets of banks are reserves and loans, and the only liability is deposits. 1. A bank with $1,500,000 in deposits has required reserves of $ if the required ratio is 10%. 2. If the bank in number I has total reserves of $200,000, then the bank has excess reserves of $ The required reserve ratio is reserves to support $400 billion in deposits If Bank A is holding S15 million in reserves, then Bank A has checkable deposits equal to S reserve ratio is 20% If the required reserve ratio is 10%, the value of the simple deposit multiplier is If the required reserve is i0%, then S2 million in bank reserves can support a maximum of 3 if banks are required to hold $60 billion in 4. , if excess reserves are currently equal to zero and the required 5. in deposits 7. Required reserves are $ when total reserves are $800,000, the required reserve ratio is 20%, and total checkable deposits are $4,000,000 8. Based on the information in number 7, excess reserves are $ The required reserve ratio is reserves to support $1,000 billion in deposits. If the required reserve ratio is i0% and Bank C is holding $400,000 in reserves, then Bank C's checkable deposits are S currently equal to zero. 9. if banks are required to hold S 125 billion in 10. if Bank C has excess reserves 205 Chapter 10 AssignmentsExplanation / Answer
1. 10% of $1,500,000 = $150,000. Reserves are that part of deposits that banks must hold and not lend out.
2. Excess reserves= Total reserves less required reserves. S200,000 - $ 150,000 = $50,000.
3. Required reserve ratio = $60/$400=0.15 or 15%
4. Checkable deposits equals = $75m ((100/20)x15),
5. Simple deposit multiplier is the inverse of reserve requirment ratio (1/r, where r is the reserve requirment ratio).
1/10=0.1 or 10%.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.