Homework Answers
Excess reserves of Bank one
= 40000+14000+2150-(2000+5000+1650)
= 47500
Excess reserves of Bank Two
= 60000+11000+1850-(950+2000+4000)
= 65900
Total excess reserves in economy
= 47500+65900
= 113400
Total deposits in economy
= 14000+40000+60000+11000
= 125000
Excess reserve ratio = 113400/125000*100
= 90.72
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a-$5 million
b-$10 million
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e-$65 million
Given the balance sheet above and assuming a required reserve
ratio of 20%, which of the following accurately describes the
bank's situation?
a-it is failing to meet its reserve
requirement
b-it is just meeting its reserve requirement, but has no excess
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