Q-1 :: ANSWER :: $47500
=> Explanation ::
Excess Reserve = (Total Saving Deposit + Total Checking Deposit + Equity ) - ( Cash In Hand + US Government Bonds+ Deposit In Fed)
= ($14000 + $ 40000 + $2150) - ($2000 + $1650 + $5000)
= $56150 - $8650
= $47500 (Excess Reserve)
It's an economy with only two non-identical banks, called Bank One and Bank Two. In addition...
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