U.S Treasury bill are (n)... a) liability of the U.S government but an asset to the Federal Reserve. b) liability to both the U.S government and the federal reserve. c)asset of the U.U government but a liability to the Federal Reserve. d) part of the networth of the U.S government.

U.S Treasury bill are (n)... a) liability of the U.S government but an asset to the Federal Reserve. b) liability to both the U.S government and the federal reserve. c)asset of the U.U government but a liability to the Federal Reserve. d) part of the networth of the U.S government.

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter14: Banking And The Money Supply

Section: Chapter Questions

Problem 3.7P

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Concept explainers

Required Reserve and Excess Reserve Analysis

A required reserve is an amount of cash that banks must keep with themselves, which is certain percentage of the deposits made by their customers. Required reserve is a percentage of the bank's deposits that the respective bank must have on each overnight. The percentage rate is set and determined by the nation’s central bank. It is important to have such funds accumulated to meet its uncertain obligations, sudden liabilities and withdrawals. Required reserve is also known as reserve ratio. Reserve ratio is an important tool to control the money supply.

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U.S Treasury bill are (n)...

a) liability of the U.S government but an asset to the Federal Reserve.

b) liability to both the U.S government and the federal reserve.

c)asset of the U.U government but a liability to the Federal Reserve.

d) part of the networth of the U.S government.

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9. Commercial banks:a) implement monetary policy.b) are nonprofit organizations that lend and borrow funds.c) are financial intermediaries that lend funds and accept deposits.d) all of the above. 11. First national bank has assets of $900,000 and liabilities of $600,000. First NationalTrust’s owner’s equity is:a) $0.b) $300,000.c) $600,000.d) $900,000.12. A bank has reserves of $40, loans of $110, deposits of $90, and owners’ equity of$60. Which of the following represents the bank’s total assets?a) $180b) $110c) $130d) $150Table 14.1: FIRST COMMERCIAL BANKAsset Liabilities___________________$150,000 Total Reserves: $1,000,000 Deposits$100,000 Required Reserves $200,000 Net Worth? Excess Reserves? Loans$1,200,000 Total $1,200,000 Total________13. Refer to Table 13. 1. First Commercial bank’s excess reserves equal $__________.a) 150,000b) 250,000c) 100,000d) 50,00014. Refer to Table 13.1. First Commercial Bank’s total loans equal $______________.a) 1,050,000b) 1,200,000c) 1,150,000d)…
Suppose the reserve requirement is currently 10%. a Assume First Bank has deposits of $90 Million. Calculate the reserves for First Bank. $_______________ million. b. At the end of the day, First bank has $8 million of reserves. Will be a borrower or lender in the federal funds market? First bank will __________________ reserves of $____________ million in the federal funds market.