Exhibit 17-1
A bank's assets consist of $500,000 in total reserves, $1,600,000 in loans, and a building worth $1,200,000. Its liabilities and capital consist of $2,000,000 in demand deposits and $1,300,000 in capital.
-Refer to Exhibit 17-1. If the required reserve ratio is 25 percent, what is the level of the bank's excess reserves? How much could it loan out as a result?
A) zero; zero
B) $500,000; $500,000
C) $500,000; $2,000,000
D) $250,000; $1,000,000
Correct Answer:
Verified
Q93: Say the required reserve ratio is 20
Q94: Exhibit 17-1
A bank's assets consist of $500,000
Q95: Loans are:
A)assets of banks, liabilities of borrowers.
B)liabilities
Q96: Exhibit 17-1
A bank's assets consist of $500,000
Q97: Exhibit 17-1
A bank's assets consist of $500,000
Q99: Exhibit 17-2
A bank's assets consist of $1,000,000
Q100: A decrease in the excess reserves banks
Q101: Assume the reserve requirement is 10 percent.
Q102: Exhibit 17-2
A bank's assets consist of $1,000,000
Q103: What is the initial impact on reserves
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