A bank is required to maintain a reserve ratio of 10% with the central bank. The bank
Fantastic news! We've Found the answer you've been seeking!
Question:
A bank is required to maintain a reserve ratio of 10% with the central bank. The bank has deposits of $1,000,000 and currently has a reserve balance of $50,000. The bank wants to make a loan of $200,000. If the bank makes the loan, what will be its new reserve ratio and how much in additional reserves must the bank acquire to meet the required reserve ratio? Assume that the bank has no excess reserves.
Related Book For
Posted Date: