The level of bank deposits is $9,681 and the banks hold $1,046 in required reserves and 765 in excess reserves. If the Fed introduces $100 worth of new reserves worth of new reserves in the economy by how much will the money supply increase.
Required reserves ratio= 1046/9681= 0.108
Excess reserves ratio = 765/9681= 0.079
Money multiplier = 1/(0.108+0.079)= 5.3476
Increase in money supply = 100/5.347= 534.76
The level of bank deposits is $9,681 and the banks hold $1,046 in required reserves and...
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Question 1 (1 point)
The amount of reserves that a commercial bank is required to
hold is equal to:
Question 1 options:
the amount of its checkable deposits.
the sum of its checkable deposits and time deposits.
its checkable deposits multiplied by the reserve
requirement.
its checkable deposits divided by its total assets.
Save
Question 2 (1 point)
Answer the question on the basis of the following information
for the Moolah Bank.
Refer to the information and assume that Moolah...