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The table shows a bank's balance sheet. The bank has no excess reserves and there is no currency drain. Suppose the bank sells $1 million
The table shows a bank's balance sheet. The bank has no excess reserves and there is no currency drain. Suppose the bank sells $1 million of government securities to the central bank in an open market operation. What is the bank's actual reserve ratio? As soon as the sale happens, how much money can the bank create? What is the total quantity of new money created when the bank has no excess reserves? E) The bank's actual reserve ratio is D. >>> Answer to 3 decimal places. Assets Liabilities (millions of dollars) Reserves at the Fed Cash in vault Securities Loans 30 25 65 85 Checkable deposits Savings deposits 85 120
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