Question
I only need the answers of the letter B Calculated. THanks Kindly A) Suppose that National Bank of Guerneville has 35 million in checkable deposits,
I only need the answers of the letter B Calculated. THanks Kindly
A) Suppose that National Bank of Guerneville has 35 million in checkable deposits, Commonwealth Bank has $42 million in checkable deposits, and the required reserve ratio for checkable deposits is 10%. If National Bank of Guerneville has $4 million in reserves and Commonwealth has $5 million in reserves, how much in excess reserves does each bank have?
National Bank of Guerneville has $ 0.5 million in excess reserves.
(35*10% = 3.5 4 - 3.5= 0.5)
Commonwealth Bank has$0.8 million in excess reserves.
(42*10% = 4.2 5-4.2 = 0.8).
B)Now suppose that a customer of National Bank of Guerneville writes a check for$2 million to a real estate broker who deposits the check at Commonwealth. After the check clears, how much in excess reserves does each bank have?
National Bank of Guerneville has $_____ million in excess reserve. (This is suposed to be negative number)
Commonwealth Bank has $ ____million in excess reserves.
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