The reserve requirement is 10%, and Leroy deposits his $1,000 check received as a graduation gift in his checking account. The bank does NOT want to hold excess reserves. a) Show the bank’s balance sheet immediately after the deposit. b) How much of the deposit is the bank required to keep in reserves? c) How much can the bank loan based on the $1,000 deposit?
The reserve requirement is 10%, and Leroy deposits his $1,000 check received as a graduation gift in his checking account. The bank does NOT want to hold excess reserves. a) Show the bank’s balance sheet immediately after the deposit. b) How much of the deposit is the bank required to keep in reserves? c) How much can the bank loan based on the $1,000 deposit?
Chapter14: Banking And The Money Supply
Section: Chapter Questions
Problem 2.3P
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The reserve requirement is 10%, and Leroy deposits his $1,000 check received as a
graduation gift in his checking account. The bank does NOT want to hold excess
reserves.
a) Show the bank’s balance sheet immediately after the deposit.
b) How much of the deposit is the bank required to keep in reserves?
c) How much can the bank loan based on the $1,000 deposit?
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