Homework Answers
Answer= $1060
Excess reserves = $600
Amount deposited by Andy = $1200
Required reserve ratio= 20% = 0.2
So, the bank has to keep 20% of $1200 as reserves and it can lend the remaining.
So,bank has to keep 20%($1200) = $240 as reserves.
So, the Bank can lend $960.
Recall that the bank already has excess reserves of $600. These are the reserves that bank chose to hold but it is not mandatory. So, the bank can lend these $600 if it wishes to. So, the excess reserves of $600 are also available for lending.
So, total amount available for lending is $960+$600 = $1560.
It has lent $500 to Molly.
So, the amount that the bank can still lend is $1560-$500 = $1060.
So, the bank can lend an additional $1060.
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QUESTION 3 Suppose that initially a bank has an excess reserves of $600 and the required...
stion Completion Status: Path: Words QUESTION 3 Suppose that initially a bank has an excess reserves...
stion Completion Status: Path: Words QUESTION 3 Suppose that initially a bank has an excess reserves of $600 and the required reserve is 20%. Then Andy deposits $1200 into his checking account, and the bank lends $500 to Molly. The bank can lend additional: TT T Arial ✓ 3 (12pt) TE Path Words 0 Ce Save and Submit to save and submit Click Save anders to save all anster
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stion Completion Status: Path: Words QUESTION 3 Suppose that initially a bank has an excess reserves of $600 and the required reserve is 20%. Then Andy deposits $1200 into his checking account, and the bank lends $500 to Molly. The bank can lend additional: TT T Arial ✓ 3 (12pt) TE Path Words 0 Ce Save and Submit to save and submit Click Save anders to save all anster
QUESTION 43 2 p Suppose that initially a bank has excess reserves of $500 and the reserve ratio is 25%. Then Andy deposits $1,200 of cash into his checking account and the bank lends $400 to Molly. That bank can lend an additional O A 5800 OB. $1400 OC. $1300 OD 5900 O E $1000
Suppose that a bank with no excess reserves receives a deposit into a checking account of $19,000 in currency. If the required reserve ratio is 0.07, what is the maximum amount that the bank can lend out? The bank can lend out $(Enter your response as an integer) Enter your answer in the answer box
6. Required and excess reserves Suppose that Second Republic Bank currently has $200,000 in demand deposits and $130,000 in outstanding loans. The Federal Reserve has set the reserve requirement at 10%. Reserves (Dollars) Second Republic Required Reserves (Dollars) Excess Reserves (Dollars)
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