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In: Economics

Given the information below:      rd = 10% Municipal Bonds = $11,700,000       Household CD’s = $32,250,000     ...

Given the information below:

     rd = 10% Municipal Bonds = $11,700,000       Household CD’s = $32,250,000

     Transactions Deposits = $72,150,000      Savings Deposits = $125,250,000     Vault Cash = $4,160,000

     Secondary reserves = $14,000,000           Bank deposits with the Fed = $22,500,000

Determine:

a) the level of required reserves, excess reserves, and the level of total reserves.

b) the maximum deposit outflow a bank can sustain without having to acquire additional reserves.    

Solutions

Expert Solution

Rahul Sunny answered 7 months ago
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