The Third National Bank has reserves of $\$ 20,000$ and checkable deposits of $\$ 100,000 .$ The reserve ratio is 20 percent. Households deposit $\$ 5000$ in currency into the bank that is added to reserves. What level of excess reserves does the bank now have? $L O 4$
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Step 1
Step 1: Calculate the total deposits after households deposit $5000: Total deposits = Checkable deposits + Household deposit Total deposits = $100,000 + $5,000 Total deposits = $105,000 Show more…
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