Consider an individual who moves to Canada and brings with him his life savings of $60,000, which he deposits in a Canadian bank. For each of the cases below, compute the overall change in deposits and reserves in the Canadian banking system as a result of this new deposit. a. 10 percent target reserve ratio; percent cash drain; 6 percent excess reserves: Overall change in deposits = $ Overall change in reserves = $. (Round your responses to the nearest dollar.) b. 16 percent target reserve ratio; percent cash drain; 5 percent excess reserves: Overall change in deposits = $ Overall change in reserves = $ (Round your responses to the nearest dollar.)
Consider an individual who moves to Canada and brings with him his life savings of $60,000, which he deposits in a Canadian bank. For each of the cases below, compute the overall change in deposits and reserves in the Canadian banking system as a result of this new deposit. a. 10 percent target reserve ratio; percent cash drain; 6 percent excess reserves: Overall change in deposits = $ Overall change in reserves = $. (Round your responses to the nearest dollar.) b. 16 percent target reserve ratio; percent cash drain; 5 percent excess reserves: Overall change in deposits = $ Overall change in reserves = $ (Round your responses to the nearest dollar.)
Chapter25: Money Creation
Section: Chapter Questions
Problem 8SQP
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