Assume Company X deposits $100,000 in cash in commercial Bank A. If no excess reserves exist at the time this deposit is made and the reserve ratio is 20 percent, Bank A can increase the money supply by a maximum of $180,000. $80,000. $500,000 $50,000.
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Assume Company X deposits $100,000 in cash in commercial Bank A. If no
-
- $180,000.
- $80,000.
- $500,000
- $50,000.
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- If a bank has excess reserves of $20,000 and demand deposit liabilities of $80,000, and if the reserve requirement is 20 percent, then the bank has total reserves of$36,000Your bank has the following balance sheet: Assets Liabilites Reserves $50 million Checkable Deposits $200 million Securites $50 million Bank Capital $50 million Loans $150 million If the required reserve ratio is 10%, what possible actions can the bank manager take if there is an unexpected deposit outflow of $50 million?When you open a checking account at Bank of America, Bank of America has more reserves and more excess reserves. has more reserves, but excess reserves remain unchanged. has more deposits and less in excess reserves. has more deposits, but excess reserves remain unchanged.
- If a bank has $50,000 in deposits, $20,000 in total reserves, and the required reserve ratio the bank must abide by is 15%, how many excess reserves does the bank have? Please do not enter the dollar sign ($).A financial depository institution's reserve requirement is a specified percentage of: Group of answer choices deposits that must be kept as actual reserves. regulated reserves provided by the federal government. required reserves that must be kept as part of actual reserves. actual reserves kept at the federal reserve. excess reserves that must be backed as required reserves.Say that First Commercial Bank has reserves of $100, loans at $400 and checkable deposits of $500. The required reserve ratio is 10%. If the bank has a deposit outflow of $40, is the bank in violation of the required reserve ratio? What is the maximum amount of deposit outflow the bank can sustain without violating the ratio?
- If kelly deposits $450 into his bank and the reserve ratio is 9.5%, what would be the amount of required reserves and excess reserves that are immediately createdIf the reserve requirement is 25%, then a $500 increase in deposits means that the money supply has the potential to increase by $125. will increase by $2,000. will increase by $125. has the potential to increase by $2,000.Assume Company X deposits $100,000 in cash in commercial Bank A. If no excess reserves exist at the time this deposit is made and the reserve ratio is 25 percent, Bank A can increase the money supply by a maximum of A) $75,000. B) $500,000. C) $80,000. D) $180,000.
- If banks decide to hold some of their excess reserves instead of lending them all out, then: A) the money multiplier will be less than 1 divided by the required reserve ratio. B) depositors will have to borrow more in order to increase the money supply. C) the money multiplier becomes 1 divided by the excess reserves. D) a loan of $1 will lead to a change in the money supply by a multiple amount equal to 1 divided by the required reserve ratio.Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 25%. The Federal Reserve buys a government bond worth $1,800,000 from Felix, a customer of First Main Street Bank. He deposits the money into his checking account at First Main Street Bank. Now, suppose First Main Street Bank loans out all of its new excess reserves to Deborah, who immediately writes a check for the full amount to Carlos. Carlos then immediately deposits the funds in his checking account at Second Republic Bank. Then Second Republic Bank lends out all of its new excess reserves to Larry, who writes a check to Janet, who deposits the money in her account at Third Fidelity Bank. Finally, Third Fidelity lends out all of its new excess reserves to Megan. Assume this process continues, with each successive loan deposited into a checking account and no banks keeping any excess reserves. Under these assumptions, the $1,800,000 injection…A chartered bank has $1 million in deposits and $40,000 in desired reserves. Its excess reserves are initially zero. a. The reserve ratio in the banking system is .......%. b. If a further $100,000 is deposited in this bank then the bank's desired reserves increase by $.......while the bank's excess reserves increase by $........
