- Bant of wyorning has reserves of $210, I loans at $1,110 and chectable deposits a...

Question

Question

Answer 1

Answer #1

Required reserve = Checkable Deposits*% Required Reserve

- Checkable Deposits = $ 1320

Reserves = $210

a). If Required reserve ratio = 9%

Required reserve = $ 1320*9%

= $ 118.8

Excess reserve if required reserve is 9% = $ 210 - $ 118.8

= $ 91.2

b). If Required reserve ratio = 4%

Required reserve = $ 1320*4%

= $ 52.8

Excess reserve if required reserve is 9% = $ 210 - $ 52.8

= $ 157.2

So, Bank's excess reserve rise from $ 91.2 to $ 157.2.

Hence, Option B

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Answer 2

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