A small state bank currently has reserves equal to $300,000. If the state reserve requirement is 20%, but the bank feels more comfortable with maintaining a 30% reserve, what amount of deposits does the bank currently have? Group of answer choices $1,500,000 $600,000 $1,000,000 $300,000
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20%, but the bank feels more comfortable with maintaining a 30% reserve, what amount of
deposits does the bank currently have?
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- National Bank currently has $500 million in transaction deposits on its balance sheet. The current reserve requirement is 15 percent. The Federal Reserve decreases this requirement to 10 percent. Assume National Bank does not keep any excess reserve before and after the change in reserve ratio. National Bank is the only commercial bank in this economy. Show the balance sheet of the Federal Reserve and National Bank before and after the reserve requirement change if National Bank does not keep any excess reserve after the change in reserve ratio, and public deposit all the cash in National Bank as transaction deposits.The banking system has $8,000 in reserve, $22,000 in loans, and $30,000 in deposits. If the reserve requirement is 10%. What is the maximum amount of loans the banking system could make? A: If the Fed lowers reserve requirement to 5%, the banking system converts all excess reserves to loans, but borrowers return only 50% of these funds to the banking system as deposits. What is the maximum amount of loans the banking system could make? B: If the Fed lowers reserve requirement to 5%, the banking system converts 75% excess reserves to loans, but borrowers return only 60% of these funds to the banking system as deposits. What is the maximum amount of loans the banking system could make?Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 20%. The Bank of Canada buys a government bond worth $750,000 from Eric, a client of First Main Street Bank. He deposits the money into his chequing account at First Main Street Bank. NOTE: the options for the LEFT dropdown question for ASSETS are (building and furniture or deposits or loans or networth or reserves) the options for the RIGHT dropdown question for ASSETS are ($150,000 or $600,000 or $750,000 or $1,800,000) the options for the LEFT dropdown question for LIABILITIES are (building and furniture or deposits or loans or networth or reserves) the options for the RIGHT dropdown question for LIABILITIES are ($150,000 or $600,000 or $750,000 or $1,800,000) the VERY last dropdown question at the bottom choices are ($375,000 or $3,000,000 or $3,750,000)
- National Bank currently has $500 million in transaction deposits on its balance sheet. The current reserve requirement is 10 percent, but the Federal Reserve is decreasing this requirement to 8 percent.What is the balance sheet of the Federal Reserve and National Bank if National Bank converts all excess reserves to loans, but borrowers return only 50 percent of these funds to National Bank as transaction deposits?Bank Three currently has $850 million in transaction deposits on its balance sheet. The Federal Reserve has currently set the reserve requirement at 6 percent of transaction deposits. a. If the Federal Reserve decreases the reserve requirement to 4 percent, show the balance sheet of Bank Three and the Federal Reserve System just before and after the full effect of the reserve requirement change. Assume Bank Three withdraws all excess reserves and gives out loans and that borrowers eventually return all of these funds to Bank Three in the form of transaction deposits.b. Redo part (a) using a 10 percent reserve requirement.Bank Three currently has $650 million in transaction deposits on its balance sheet. The Federal Reserve has currently set the reserve requirement at 6 percent of transaction deposits. a. If the Federal Reserve decreases the reserve requirement to 4 percent, show the balance sheet of Bank Three and the Federal Reserve System just before and after the full effect of the reserve requirement change. Assume Bank Three withdraws all excess reserves and gives out loans and that borrowers eventually return all of these funds to Bank Three in the form of transaction deposits
- Bank Three currently has $600 million in transaction deposits on its balance sheet. The Federal Reserve has currently set the reserve requirement at 10 percent of transaction deposits. (LG 4-3) If the Federal Reserve decreases the reserve requirement to 8 percent, show the balance sheet of Bank Three and the Federal Reserve System just before and after the full effect of the reserve requirement change. Assume Bank Three withdraws all excess reserves and gives out loans and that borrowers eventually return all of these funds to Bank Three in the form of transaction deposits. Redo part (a) using a 12 percent reserve requirement.A bank has $400 million in demand deposits and desires a 20 percent reserve ratio. How much will it hold as reserves? O a. $200 million O b. $120 million O c. $80 million O d. $500 millionWasn't the $25,000 on the initial Reserve considered Required Reserve? If so, the Excess Reseve would originally be $75,000 (100,000*0.75). When the household deposited $4,000 into the bank, the Deposits increased from $100,000 to $104,000. Since the Required Reserve Ratio was 25%, that means, Required Reserve increases $1,000 (4,000*25%), and has $26,000 ($104,000*25%) or ($25,000 + 1,000). As a result, the Excess Reserve now increased 3,000 (4,000 -1,000), and becomes $78,000 ($75,000 + 3000). Wasn't the answer supposed to be $78,000?
- MHM Bank currently has$750million in transaction deposits on its balance sheet. The current reserve requirement is 8 percent, but the Federal Reserve is increasing this requirement to 10 percent. a. Show the balance sheet of the Federal Reserve and MHM Bank if MHM Bank converts all excess reserves to loans, but borrowers return only 50 percent of these funds to MHM Bank as transaction deposits.ABC Corporation has a lower and an upper limit for its savings account at 40,000 and 70,000 respectively. Its optimal return point is 50,000. If as of the end of the day, ABC has a cash balance of 13,000. How much should be it request for additional funds or onvest in marketable securities? Because its cash balance is less than lower cash limit, ABC should request for additional funds in the amount of:The Saban Corporation is trying to decide whether to switch to a bank that will accommodate electronic funds transfers from Saban's customers. Saban's financial manager believes the new system would decrease its collection float by as much as 6 days. The new bank would require a compensating balance of $23,000, whereas its present bank has no compensating balance requirement. Saban's average daily collections are $10,200, and it can earn 8.6% on its short-term investments. Should Saban make the switch? (Assume the compensating balance at the new bank will be deposited in a non-interest-earning account.)
