The commercial banks in Lendland have
Reserves $400 million
Loans $3,600 million
Deposits $4,000 million
Total assets $4,600 million
The banks hold no excess reserves.
a)Calculate the banks' reserve ratio.
b)An immigrant arrives in Lendland with $5 million, which he deposits in a bank. How much does the immigrant's bank lend initially?

Question

The commercial banks in Lendland have
Reserves	 $400 million
Loans	$3,600 million
Deposits	$4,000 million
Total assets	$4,600 million
The banks hold no excess reserves.
a)Calculate the banks' reserve ratio.
b)An immigrant arrives in Lendland with $5 million, which he deposits in a bank. How much does the immigrant's bank lend initially?

Quizplus · Accepted Answer

The Answer of The commercial banks in Lendland have
Reserves	 $400 million
Loans	$3,600 million
Deposits	$4,000 million
Total assets	$4,600 million
The banks hold no excess reserves.
a)Calculate the banks' reserve ratio.
b)An immigrant arrives in Lendland with $5 million, which he deposits in a bank. How much does the immigrant's bank lend initially?

The Commercial Banks in Lendland Have