Suppose that National Bank of Guerneville has $31 million in checkable deposits, Commonwealth Bank has $43 million in checkable deposits, and the required reserve ratio for checkable deposits is 10%. If National Bank of Guerneville has $4 million in reserves and Commonwealth has $5 million in reserves, how much in excess reserves does each bank have? (Enter your answers rounded to one decimal place.) National Bank of Guerneville has $ 0.9 million in excess reserves. Commonwealth Bank has $ 0.7 million in excess reserves. Now suppose that a customer of National Bank of Guerneville writes a check for $1 million to a real estate broker who deposits the check at Commonwealth. After the check clears, how much in excess reserves does each bank have? National Bank of Guerneville has $0 million in excess reserves. Commonwealth Bank has $ million in excess reserves.
Suppose that National Bank of Guerneville has $31 million in checkable deposits, Commonwealth Bank has $43 million in checkable deposits, and the required reserve ratio for checkable deposits is 10%. If National Bank of Guerneville has $4 million in reserves and Commonwealth has $5 million in reserves, how much in excess reserves does each bank have? (Enter your answers rounded to one decimal place.) National Bank of Guerneville has $ 0.9 million in excess reserves. Commonwealth Bank has $ 0.7 million in excess reserves. Now suppose that a customer of National Bank of Guerneville writes a check for $1 million to a real estate broker who deposits the check at Commonwealth. After the check clears, how much in excess reserves does each bank have? National Bank of Guerneville has $0 million in excess reserves. Commonwealth Bank has $ million in excess reserves.
Chapter13: Monetary Policy
Section: Chapter Questions
Problem 8E
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc