Question
You are the Federal Reserve Police and you go into Uckville Bank. When you check the vault you see $1.6 million The reserve requirement is
You are the Federal Reserve Police and you go into Uckville Bank. When you check the vault you see $1.6 million The reserve requirement is 5.0% and on the books are $28 million in outstanding checkable deposits.
a. By how much more in checkable deposits can Uckville expand? Show work. b. What are the excess reserves? Show work. c. Now make up your own Federal Reserve Police problem and solve it. Show work.
Step by Step Solution
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Step: 1
Given Information Amount in the vault 16 million 1600000 Reserve Requirement 5 Outstanding checkable ...
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Step: 2
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Economics
Authors: R. Glenn Hubbard
6th edition
978-0134797731, 134797736, 978-0134106243
