Bank Reserve Question

Dec 23rd, 2014
SoccerBoss
Category:
Economics
Price: $10 USD

Question description

Suppose that the reserve ratio is .25, and that a bank has actual reserves of $15,000, loans of $40,000, and demand deposits of $50,000.

A. Excess reserves are $____________________.

B. This bank, being a single bank in a multibank system, can safely lend $____________________.

C. The multibank system can safely lend $__________________.

D. It is possible for the monetary base to increase by a total of $___________________. Assume now that the Fed lowers the reserve ratio to .20:

E. This bank, being a single bank in a multibank system, can now safely lend $_____________________.

F. The multibank system can safely lend $____________________.

G. It is now possible for the monetary base to increase by a total of $________________________.

H. The increase/decrease in the potential money supply because of the decrease in the required reserve ratio is $_____________________.


Tutor Answer

(Top Tutor) Daniel C.
(997)
School: UIUC
PREMIUM TUTOR

Studypool has helped 1,244,100 students

8 Reviews


Summary
Quality
Communication
On Time
Value
tinytim47
Nov 30th, 2016
" Wow this is really good.... didn't expect it. Sweet!!!! "
Five Star Tutor
Nov 20th, 2016
" Outstanding Job!!!! "
mixedballz
Nov 16th, 2016
" excellent work as always thanks for the help "
lilmoe415
Nov 7th, 2016
" Thank you, Thank you, for top quality work, this is your guy!! "
darnay
Oct 25th, 2016
" The best tutor out there!!!! "
dontuwannaknow
Oct 16th, 2016
" Excellent work as always thanks so much "
SjSurvivor143
Oct 2nd, 2016
" Thanks for the help. "
Joemoe
Sep 19th, 2016
" <3 it, thanks for saving me time. "
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1823 tutors are online

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors