Based on the information in the table, what quantity of reserves did the Federal Reserve inject into the economy in 1932?

A)$0.30 billion
B)$0.23 billion
C)$0.16 billion
D)$0.07 billion

Question

Based on the information in the table, what quantity of reserves did the Federal Reserve inject into the economy in 1932?

A)$0.30 billion 
B)$0.23 billion 
C)$0.16 billion 
D)$0.07 billion

Quizplus · Accepted Answer

Bank deposits = (Bank reserves)/(Desired reserve-deposit ratio). The Federal Reserve injected reserves of $0.30 billion. Some of this ($0.23 billion)was held as currency ($4.82 billion - $4.59 billion)and some ($0.07 billion)was held as bank reserves ($3.18 billion - $3.11 billion).

Based on the Information in the Table, What Quantity of Reserves