Suppose the banking system currently has $400 billion in reserves, the reserve requirement is 8...
|
Suppose the banking system currently has $400 billion in reserves, the reserve requirement is 8 percent, and excess reserves amount to $5 billion. What is the level of deposits? |
|||||||||||
|
|||||||||||
Homework Answers
Solution: $4,937.5 billion
Working:
Minimum Required Reserves = Current Reserves – Excess Reserves
Minimum Required Reserves = 400 – 5 = $395
R = (Min Required Reserves) / (Total Deposits)
Total Deposits = 395 / 0.08 = $4937.5
Add Answer to:
Suppose the banking system currently has $400 billion in reserves, the reserve requirement is 8...
1a) Suppose the banking system currently has $300 billion in reserves, the reserve requirement is 5...
1a) Suppose the banking system currently has $300 billion in reserves, the reserve requirement is 5 percent, and excess reserves are $30 billion. What is the level of loans? $5,400 billion $5,100 billion $270 billion b) When the Fed purchases $1000 worth of government bonds from the public, the US money supply eventually increases by less than $1000 exactly $1000 none of these are correct more than $1000 $6,000 billion c) If the aggregate demand curve shifts left, then in...
The banking system currently has $50 billion of reserves, none of which are excess. People hold...
The banking system currently has $50 billion of reserves, none of which are excess. People hold only deposits and no currency, and the reserve requirement is 10percent. If the Fed raises the reserve requirement to 12.5 percent and at the same time sells $10 billion worth of bonds, then by how much does the money supplychange?
Suppose a banking system with the following balance sheet has no excess reserves. Assume that ban...
Suppose a banking system with the following balance sheet has no excess reserves. Assume that banks will make loans in the full amount of any excess reserves that they acquire and will immediately be able to eliminate loans from their portfolio to cover inadequate reserves Assets (in Billions) Liabilities (in Billions) Total reserves $ 30 Transactions account 190 deposits 180 400 Loans Total assets 400 Total liabilities 400 Instructions: In part a, enter your response as a percentage rounded to...
Assume that the banking system initially has total reserves of €500 billion, while the reserve requirement...
Assume that the banking system initially has total reserves of €500 billion, while the reserve requirement is equal to 50%. Assume also that banks hold no excess reserves and households hold no currency. What would happen with total reserves and the total amount of money in the economy if the reserve requirement would decrease to 25%? A) The amount of money would increase by 50%, while the amount of reserves would remain the same. B) The amount of money would...
Assume that the banking system has total reserves of $200 billion. Assume also that required reserves...
Assume that the banking system has total reserves of $200 billion. Assume also that required reserves are 12.5 percent of checking deposits and that banks hold no excess reserves and households hold no currency. The money multiplier is ____. The money supply is ____ billion. Suppose the Fed raises required reserves to 16 percent of deposits. The new money multiplier is____, and the money supply Increases/Decreases to _____ billion.
The banking system has $5,000 in reserve, $45,000 in loans, and $50,000 in deposits. Currently the...
The banking system has $5,000 in reserve, $45,000 in loans, and $50,000 in deposits. Currently the reserve requirement is 10%. If the Fed lowers reserve requirement to 5%, what is the maximum amount of loans the banking system could make?
Suppose the simplified consolidated balance sheet shown below is for the entire commercial banking system and that all figures are in billions of dollars. The reserve ratio is 25 percent. Instru...
Suppose the simplified consolidated balance sheet shown below is for the entire commercial banking system and that all figures are in billions of dollars. The reserve ratio is 25 percent. Instructions: Refer to the balance sheet below. Enter your answers as whole numbers a. What is the amount of excess reserves in this commercial banking system? $billion. What is the maximum amount the banking system might lend?billion. Show in columns 1(a) and 1(a) how the consolidated balance sheet would look...
6. If reserves in the banking system increase by $100, then checkable deposits will increase by...
6. If reserves in the banking system increase by $100, then checkable deposits will increase by $400 in the simple model of deposit creation when the required reserve ratio is eserve retioKeserves De posi+s 7. If the required reserve ratio is one-third, curreney in circulation is $300 billion, checkable deposits are $900 billion, and there is no excess reserve, then the MI money multiplier is 8. If the required reserve ratio is 10 percent, currency in circulation is $400 billion,...
Suppose the simplified consolidated balance sheet shown below is for the entire commercial banking system and...
Suppose the simplified consolidated balance sheet shown below is for the entire commercial banking system and that all figures are in billions of dollars. The reserve ratio is 10 percent Instructions: Refer to the balance sheet below. Enter your answers as whole numbers a. What is the amount of excess reserves in this commercial banking system? $billion. What is the maximum amount the banking system might lend?billion. Show in columns 1(a) and 1(a) how the consolidated balance sheet would look...
Assume that the following data describe the condition of the banking system: Total Reserves: $150 billion...
Assume that the following data describe the condition of the banking system: Total Reserves: $150 billion Transactions deposits: $600 billion saving deposits: 300 Cash held by public: $100 billion Reserve Requirement: 0.15 1. How large is the money supply (M1)? 2.How large are required reserves? 3.How large are excess reserves? 4. By how much could the banks increase their lending activity?
Suppose a banking system with the following balance sheet has no excess reserves. Assume that banks will make loans in the full amount of any excess reserves that they acquire and will immediately be able to eliminate loans from their portfolio to cover inadequate reserves Assets (in Billions) Liabilities (in Billions) Total reserves $ 30 Transactions account 190 deposits 180 400 Loans Total assets 400 Total liabilities 400 Instructions: In part a, enter your response as a percentage rounded to...
Suppose the simplified consolidated balance sheet shown below is for the entire commercial banking system and that all figures are in billions of dollars. The reserve ratio is 25 percent. Instructions: Refer to the balance sheet below. Enter your answers as whole numbers a. What is the amount of excess reserves in this commercial banking system? $billion. What is the maximum amount the banking system might lend?billion. Show in columns 1(a) and 1(a) how the consolidated balance sheet would look...
6. If reserves in the banking system increase by $100, then checkable deposits will increase by $400 in the simple model of deposit creation when the required reserve ratio is eserve retioKeserves De posi+s 7. If the required reserve ratio is one-third, curreney in circulation is $300 billion, checkable deposits are $900 billion, and there is no excess reserve, then the MI money multiplier is 8. If the required reserve ratio is 10 percent, currency in circulation is $400 billion,...
Suppose the simplified consolidated balance sheet shown below is for the entire commercial banking system and that all figures are in billions of dollars. The reserve ratio is 10 percent Instructions: Refer to the balance sheet below. Enter your answers as whole numbers a. What is the amount of excess reserves in this commercial banking system? $billion. What is the maximum amount the banking system might lend?billion. Show in columns 1(a) and 1(a) how the consolidated balance sheet would look...
Most questions answered within 3 hours.
-
DP Gumby produces sleeveless sweaters. He can separate the
demand function into a domestic component: QD=...
asked 7 minutes ago -
6) Weak acids are not very soluble in water. A). TRUE B).
FALSE
The answer says...
asked 14 minutes ago -
Lab #2 Address Book Unsorted List (C++)
Using classes, design an online address book to keep...
asked 23 minutes ago -
Tucson Machinery, Inc., manufactures numerically controlled
machines, which sell for an average price of $0.5 million...
asked 39 minutes ago -
Review the referenced paper by Melse (2008). Describe the
research question being addressed. Discuss the methods...
asked 43 minutes ago -
Please do all parts. I don't want to hear your as per guidelines
stuff. Do if...
asked 53 minutes ago -
1. Why is Hardy-Weinberg Theorum important? How can we
test whether a population is in H-W...
asked 53 minutes ago -
A sample of 3 is selected from 9 cards. How many permutation is
possible? Show Work.
asked 1 hour ago -
Identify a commercial data mining software product (e.g., SAS)
and an open-source data mining product (e.g.,...
asked 1 hour ago -
Following are the capital account balances for the William,
Jennings, and Bryan partnership:
William (40% of...
asked 1 hour ago -
An investment project provides cash inflows of $770 per year for
11 years.
a. What is...
asked 1 hour ago -
About the lecture of human resource management, give me the
process and schedule of how the...
asked 1 hour ago