Economics - With MindTap (2 Terms)
13th Edition
ISBN: 9781337742030
Author: Arnold
Publisher: Cengage
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Chapter 12, Problem 8WNG
To determine
The
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John deposits $1,600 into his checking account. If the reserve ratio is 5%, what are the
required and excess reserves?
Required reserves: $
Excess reserves: $
Draw a simple T-account for First National Bank of Me, which has $9000 of deposits, a reserve ratio of 10 percent, and excess reserves of $300.
Distinguish between legally required reserves and excess reserves.
Chapter 12 Solutions
Economics - With MindTap (2 Terms)
Ch. 12.2 - Prob. 1STCh. 12.2 - Prob. 2STCh. 12.2 - Prob. 3STCh. 12.3 - Prob. 1STCh. 12.3 - Prob. 2STCh. 12.3 - Prob. 3STCh. 12.4 - Prob. 1STCh. 12.4 - Prob. 2STCh. 12.4 - Prob. 3STCh. 12 - How much money did you make last year? What is...
Ch. 12 - Prob. 2QPCh. 12 - Prob. 3QPCh. 12 - Prob. 4QPCh. 12 - Prob. 5QPCh. 12 - Prob. 6QPCh. 12 - Prob. 7QPCh. 12 - Prob. 8QPCh. 12 - Prob. 9QPCh. 12 - Prob. 10QPCh. 12 - Prob. 11QPCh. 12 - Prob. 12QPCh. 12 - Prob. 13QPCh. 12 - Prob. 14QPCh. 12 - Prob. 15QPCh. 12 - Prob. 16QPCh. 12 - Prob. 17QPCh. 12 - Prob. 1WNGCh. 12 - Prob. 2WNGCh. 12 - Prob. 3WNGCh. 12 - Prob. 4WNGCh. 12 - Prob. 5WNGCh. 12 - Prob. 6WNGCh. 12 - Prob. 7WNGCh. 12 - Prob. 8WNGCh. 12 - Prob. 9WNGCh. 12 - Prob. 10WNG
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- John deposits $3,000 into his checking account. If the reserve ratio is 15%, what are the required and excess reserves? Required reserves: $ Excess reserves: $ keep a portion of it and lend out the rest. keep every penny as vault cash since it is such a small amount. lend out every penny since almost all transactions are digital.arrow_forwardIf you deposit $40 into a checking account, and your bank has a 10% reserve requirement, the bank's excess reserves will rise by $arrow_forwardIf I own Hawkins Savings and Loan, and a customers makes a $8,000 deposit, what is the total amount I am able to lend if the reserve requirement is 15%?arrow_forward
- You just deposited $4,000 in cash into a checking account at the local bank. Assume that banks lend out all excess reserves and there are no leaks in the banking system. That is, all money lent by banks gets deposited in the banking system. Round your answers to the nearest dollar. If the reserve requirement is 20%, how much will your deposit increase the total value of checkable bank deposits? If the reserve requirement is 8%, how much will your deposit increase the total value of checkable deposits? Increasing the reserve requirement decreases the money supply. %24 %24arrow_forwardIf the required reserve ratio is 10 percent and a bank has $1,000 of deposits, then its required reserves are?arrow_forwardJohn deposits $1,800 into his checking account. If the reserve ratio is 10%, what are the required and excess reserves? Required reserves: $[ Excess reserve erves: $arrow_forward
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