Sapling Learning Suppose Robr a Bank receives a deposit of $51,589 and the reser

Question

Sapling Learning Suppose Robr a Bank receives a deposit of $51,589 and the reserve requirement is 79 following questions using this information. Answer the Round your answers to two dedmal places What is the amount that Robina Bank must keep on hand as required by the Federal Reserve (Fed)? Number What is the amount that Robina Bank must have in excess reserves from this initial deposi? Number What is the total change in the M1 money supply from this one deposit? Number Previous Check Answer Next Ex 9 Hint MacBook Air F3 F4 F5 F7 F8

Explanation / Answer

(a) Required reserves (Amount kept in hand) = Deposit x Reserve requirement = $51,589 x 7% = $3,611.23

(b) Excess reserves = Deposit - Required reserves = $(51,589 - 3,611.23) = $47,977.77

(c) Total change in M1 = Deposit / Required reserve ratio = $51,589 / 0.07 = $736,985.71

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