Bank of Springfield Assets Liabilities Reserves $19,800 Deposits $180,000 Loans 160,200 Refer to Table 29-7. If...
Bank of Springfield Assets Liabilities Reserves $19,800 Deposits $180,000 Loans 160,200 Refer to Table 29-7. If the Bank of Springfield has lent out all the money it can given its level of deposits, then what is the reserve requirement?
Homework Answers
Let the reserve requirement be r %.
Reserves = $19,800
Deposits = $180,000
so, r % of deposits = reserves
i.e., (r/100)*180,000 = 19,800
So, r = (19,800*100)/180,000 = 11%
So, the reserve requirement is 11%
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