J 7 Suppose that in a country the total holdings of banks were as follows: totalreserves (required reserves + excess reserves)=unknown, loans = $855million, deposits = $900 millionThese are the only assets and liabilitiesAssume that people hold no currency. If the banks hold 1% excess reserves,what is the required reserve ratio?1%2%4%3%O

The money supply is the supply of currency in an economy. The M1 is the narrow money supply which is…

Answered: J 7 | bartleby

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Economics

J 7

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter12: Money, Banking And The Financial System

Section12.3: How Banking Developed

Problem 3ST

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Question

J 7

Suppose that in a country the total holdings of banks were as follows: total
reserves (required reserves + excess reserves)=unknown, loans = $855
million, deposits = $900 million
These are the only assets and liabilities
Assume that people hold no currency. If the banks hold 1% excess reserves,
what is the required reserve ratio?
1%
2%
4%
3%
O

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