1) Suppose we deposit $565 worth of currency into the bank. Banks make as many loans...

1) Suppose we deposit $565 worth of currency into the bank. Banks make as many loans as possible, people hold no additional currency, and the reserve ratio is 15%. As a result of the loan process, what is the value of total deposits in the banking system? Enter a whole number with no dollar sign. Round to the nearest whole number.

2) Bank 1 has deposits of $4101 and reserves of $694. If the required reserve ratio is 10%, what is the value of the bank's required reserves? Enter a whole number with no dollar sign. Round to the nearest whole number.

3) Bank 1 has deposits of $5521 and reserves of $1003. If the required reserve ratio is 10%, then what is the largest loan the bank can make? Enter a whole number with no dollar sign. Round to the nearest whole number.

4)If the banking system as a whole has reserves equal to $572 and the reserve ratio is 18% then what is the value of deposits, assuming banks hold no excess reserves? Enter a whole number with no dollar sign. Round to the nearest whole number.

5) If the reserve ratio is equal to 9% then what is the value of the money multiplier? Enter a number rounded to two decimal places.

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

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