A chartered bank has $1 million in deposits and $40,000 in desired reserves. Its excess reserves are initially zero. a. The reserve ratio in the banking system is .......%. b. If a further $100,000 is deposited in this bank then the bank's desired reserves increase by $.......while the bank's excess reserves increase by $........
A chartered bank has $1 million in deposits and $40,000 in desired reserves. Its excess reserves are initially zero. a. The reserve ratio in the banking system is .......%. b. If a further $100,000 is deposited in this bank then the bank's desired reserves increase by $.......while the bank's excess reserves increase by $........
Chapter19: Money Creation
Section: Chapter Questions
Problem 4SQP
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A chartered bank has $1 million in deposits and $40,000 in desired reserves. Its
a. The reserve ratio in the banking system is .......%.
b. If a further $100,000 is deposited in this bank then the bank's desired reserves increase by $.......while the bank's excess reserves increase by $........
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