Question
Suppose the National Bank of Commerce has excess reserves of $\$ 8000$ and outstanding checkable deposits of \$150,000. If the reserve ratio is 20 percent, what is the sixe of the bank's actual reserves? $L O 4$
Step 1
The required reserves is determined by the product of the checkable deposits and the reserve ratio. In this case, the checkable deposits is \$150,000 and the reserve ratio is 20% or 0.2 in decimal form. So, the required reserves is: \[ \$150,000 \times 0.2 = Show more…
Show all steps
Your feedback will help us improve your experience
Mihir Nayar and 70 other educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Key Concepts
Recommended Videos
Suppose the National Bank of Commerce has excess reserves of $$ 8000$ and outstanding checkable deposits of $150,000. If the reserve ratio is 20 percent, what is the sixe of the bank's actual reserves?
Suppose a bank has $\$ 250,000$ in deposits, and $\$ 10,000$ in excess reserves. If the required reserve ratio is $20 \%$, what are the bank's actual reserves?
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? $L O 4$
Transcript
18,000,000+
Students on Numerade
Trusted by students at 8,000+ universities
Watch the video solution with this free unlock.
EMAIL
PASSWORD