Homework Answers
a.
(Figures are in million dollar)
Desired reserve = Deposits × Required reserve ratio
= 1,000 × 10%
= 100 (Answer)
Excess reserve = Actual reserve – Desired reserve
= 200 – 100
= 100 (Answer)
b.
T-account (figures are in million)
|
Assets |
Liabilities |
|
Actual reserve (desired) $100 |
Deposit $1,000 |
|
Loan $800 |
|
|
Bonds $100 |
c.
Change in loans = Additional loan / required reserve ratio
= $100 million / 0.10
= $1,000 million (Answer)
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