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Assume a required reserve ratio of 10 percent. A check for $80,000 is drawn on an account in Bank One and deposited in a demand
Assume a required reserve ratio of 10 percent. A check for $80,000 is drawn on an account in Bank One and deposited in a demand deposit in Bank Two.
- How much have the excess reserves of Bank Two increased?
- How much in the form of new loans is Bank Two now able to extend to borrowers?
- By how much have reserves of Bank One decreased?
- By how much have excess reserves of Bank One decreased?
- The money supply has increased by how much?
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Foundations of Macroeconomics
Authors: Robin Bade, Michael Parkin
8th edition
134492005, 978-0134492001
