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In: Economics

The Bank of Springfield has total reserves of $300, loans of $500 and on the liabilities...

The Bank of Springfield has total reserves of $300, loans of $500 and on the liabilities side demand deposits of $1,000.If the customers write checks for $200 and the required reserve ratio is 20%, then its required reserves fall to?

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Expert Solution

Answer = $200

Solution =

Required Reserves = Deposits × reserve ratio

Required Reserves = $1000 × 20% = $200

Rahul Sunny answered 2 years ago
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