Calculate the (economy-wide) currency ratio

Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter25: Money, Banking, And The Federal Reserve System
Section: Chapter Questions
Problem 13P
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Bank A:
Reserves on hand $38,000
Deposit in the Fed $30,000
US government bonds $12,000
Checking account balances $120,000
Savings account balances $25,000

Bank B:
Reserves on hand $50,000
US government bonds $7500
Savings account balances $20,000
Checking account balances $100,000

In addition, people in this economy hold $8800 in cash, and all banks have the same reserve requirements we've used all semester.

Calculate the (economy-wide) currency ratio, carefully following all numeric instructions. Do not convert the ratio into percent. In other words, if you get k of 0.99, enter only 0.99 in the blank.

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