Type of Deposit Reserve Requirement Checkable Deposits $7.8 - 48.3 Million 3% Over $48.3 Million 10 Noncheckable personal savings and time deposits Refer to the accompanying table. If a bank has $60 million in savings deposits and $40 million in checkable deposits, then its required reserves are Multiple Cholce $30 million. $3 million. $1.8 million. $1.2 million.

Type of Deposit Reserve Requirement Checkable Deposits $7.8 - 48.3 Million 3% Over $48.3 Million 10 Noncheckable personal savings and time deposits Refer to the accompanying table. If a bank has $60 million in savings deposits and $40 million in checkable deposits, then its required reserves are Multiple Cholce $30 million. $3 million. $1.8 million. $1.2 million.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter16: Information, Risk, And Insurance

Section: Chapter Questions

Problem 8RQ: What are some ways that someone looking for a loan might reassure a bank that is faced with...

See similar textbooks

Similar questions

In a program of deposit insurance as it is operated in the United States, what is being insured and who pays the insurance premiums?
How much money do you have to put into a bank account that pays 10% interest compounded annually to have 10,000 in ten years?
It is not unusual to find a business that displays a signsaying “no personal checks, please.” On the basis of thisobservation, comment on the relative degree of liquidityof a checking account versus currency
Stealth bank has deposits of $300 million. It holds reserves of $20 million and has purchased government bonds worth $300 million. The bank's loans, if sold at current market value, would be worth $600 million. What does Stealth bank’s net worth equal? a. $1.22 billion b. $920 million c. $620 million d. $20 million
Assume the annual fixed term deposit rate is 3.4% in a New Zealandbank. Mary has $10,000 and plans to deposit into the bank for two years. She also wants thebank to reinvest her interests. The bank gives her the option to choose payment frequencyin each year from 1, 2, and 4. The frequency tells how many times the bank pays her theinterests. Suppose there is no interest tax.a) How much Mary will get when the deposit matures after two years, when the interestpayment frequencies per year are 1, 2, and 4 times, respectively? Which option is bestfor Mary? [5 marks]b) Former Chief Economist, John McDermott, in the Reserve Bank of New Zealand, saysthat inflation is a thief in your wallet. Suppose the inflation rate in New Zealand inthe coming a few years is 2%. What are the real rates of returns of the annual bankdeposit rate under the approximation rule, and in the exact relationship, respectively.
True or False: 1. The main reason people demand and hold money instead of ex bonds, is that it earns interest payment. Type out the correct answer and give proper explanation of why true n why false . Answer within 40 min.thank you
This means that money is something which can be kept for long periods without deterioration or wastage as time passes. *A. Money as a Transfer of ValueB. Money as a Store of ValueC. Money as a Standard of Deferred PaymentsD. Money as the Most of Liquid of all Assets
270 Q3 (No HANDWRITING): What are the “Reserves” and compare between Contingency reserves and Management reserves? Cite an example for each type.
Give only typing answer with explanation and conclusion If a bank expects interest rates to go up in six months and it currently has a negative rate-sensitive six-month gap (RSA - RSL), what actions should it take, if any, to preserve or increase its net interest income (NII)?
Assuming an economy have only two commercial banks in it banking system, Classic Bank and Prudent Bank. The following shows the balance sheet of the two banks as at 2019.Classic BankBalance sheet as at December, 2019GHSm GHSmAssets: Liabilities & Equity:Reserves 1,000 Deposits 3,000Securities 2,000 Equity 7,000Loans & Advances 1,000Property, Plant and Equipment 6,000 .10,000 10,000 Prudent BankBalance sheet as at December, 2019GHSm GHSmAssets: Liabilities & Equity:Reserves 600 Deposits 2,500Securities 1,500 Equity 4,400Loans & Advances 800Property, Plant and Equipment 4,000 .6,900 6,900Assume a required reserve ratio of 10%.(a) What is the amount of excess reserves in this commercial banking system? (b)What is the maximum amount that the money supply can be expanded? What would be the effect of a fall in reserve ratio to 5%, on the maximum amount that the money supply can be expanded? (c) Determine the stock of broad money supply assuming the non-bank public holds…
The Bangladesh Bank has created additional money worth Tk70,794 crore through variousrefinance schemes and easing regulatory requirements after the Covid-19 outbreak in March forstimulating demand to revive the declining economy. (link:https://tbsnews.net/economy/banking/bangladesh-bank-creates-money-worth-over-tk70000cr-revive-economy-76435?fbclid=IwAR108OXKcbXq6JjZj6v9FbULrDtys_QsZySUTKeAmauoqTjppgnLqU89muw#.Xq5kdXhgRqq.facebook).Do you think creating this additional money will lead to inflation? What type of inflation,demand-induced or supply-induced? Do you think it will be continued inflation? Why? Draw arelevant diagram to explain your answer.