Macroeconomics
13th Edition
ISBN: 9781337617390
Author: Roger A. Arnold
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 12.3, Problem 1ST
To determine
Identify the changes in bank deposits.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
How is a bank able to lend more money than it has in reserves?
How to figure out the banks' excess reserves.
A bank has $30,000 in deposits and has $5,400 in reserves. What is its reserve ratio?
Chapter 12 Solutions
Macroeconomics
Ch. 12.2 - Prob. 1STCh. 12.2 - Prob. 2STCh. 12.2 - Prob. 3STCh. 12.3 - Prob. 1STCh. 12.3 - Prob. 2STCh. 12.3 - Prob. 3STCh. 12.4 - Prob. 1STCh. 12.4 - Prob. 2STCh. 12.4 - Prob. 3STCh. 12 - How much money did you make last year? What is...
Ch. 12 - Prob. 2QPCh. 12 - Prob. 3QPCh. 12 - Prob. 4QPCh. 12 - Prob. 5QPCh. 12 - Prob. 6QPCh. 12 - Prob. 7QPCh. 12 - Prob. 8QPCh. 12 - Prob. 9QPCh. 12 - Prob. 10QPCh. 12 - Prob. 11QPCh. 12 - Prob. 12QPCh. 12 - Prob. 13QPCh. 12 - Prob. 14QPCh. 12 - Prob. 15QPCh. 12 - Prob. 16QPCh. 12 - Prob. 17QPCh. 12 - Prob. 1WNGCh. 12 - Prob. 2WNGCh. 12 - Prob. 3WNGCh. 12 - Prob. 4WNGCh. 12 - Prob. 5WNGCh. 12 - Prob. 6WNGCh. 12 - Prob. 7WNGCh. 12 - Prob. 8WNGCh. 12 - Prob. 9WNGCh. 12 - Prob. 10WNG
Knowledge Booster
Similar questions
- Bank X has a required reserve ratio of 0.2, total reserves are $70 million, and deposits are $200 million. How much in excess reserves do they have? How much could the money supply increase?arrow_forwardWhich of the following activities will affect a bank’s required reserves? why? a. The local Girl Scout troop collects coins and currency to buy a new camping stove. The troop deposits $250 in coins and opens a small-time deposit. b. You decide to move $200 from your MMDA to your NOW account. c. You sell your car to the teller at your bank for $5,000. The teller pays with a check drawn on the bank, and you deposit the check immediately into your checking account at the bankarrow_forwardThe First National Bank of Townville has $125,000 in U.S. government securities, $200,000 in savings accounts, $300,000 in checking accounts, $50,000 in its reserve account at the Fed, $10,000 of currency in its vault, and loans of $250,000. What is the amount of its reserves? Show your calculations.arrow_forward
- I'm doing economics homework and the question is asking; If a bank has $150 million in deposits and $25 million in reserves with a reserve requirement of 0.15 how much are its required reserves. I thought I was supposed to multiply the reserve requirement with the total deposits, but its telling me my answer is incorrect. What am I doing wrong?arrow_forwardThe task I am struggling with: Tracy Williams deposits $500 that was in her sock drawer into a checking account at the local bank. The reserve ratio is 10%. a) how dies the deposit initially change the T-account of the local bank? How does it change the money supply? b) If the bank maintains a reserve ratio of 10%, how will it respond to the new deposit? c) if every time the bank makes a loan, the loan results in a new checkable bank deposit in a different bank equal to the amount of the loan, by how much could the total money supply in the economy expand in response to Tracy´s initial cash deposit of $500? Thank you very much for your help.arrow_forwardWhat amount of additional money supply can a bank system create if the required reserves rate is 10%, and deposits are $5 million?arrow_forward
- Which of the following CANNOT be found on a bank’s balance sheet? deposits excess reserves required reserves cash held by individuals loansarrow_forwardYour friend Sarah borrows money from her bank to buy a car. Explain to her the transactions in which the bank sets up the loan, and why the loan involves an increase in the money supply.arrow_forwardThird National Bank has reserves of $20,000 and checkable deposits of $100,000. The reserve ratio is 20 percent. Households deposit $20,000 in currency into the bank and that currency is added to reserves. Instructions: Enter your answer as a whole number. What level of excess reserves does the bank now have?arrow_forward
- How much new amount of loan will this bank be able to create because of the excess reserves?arrow_forwardWhy don’t banks hold 100 percent reserves? How is the amount of reserves banks hold related to the amount of money the banking system creates?arrow_forwardWhy does the Federal Reserve require commercial banks to have reserves?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Economics Today and Tomorrow, Student EditionEconomicsISBN:9780078747663Author:McGraw-HillPublisher:Glencoe/McGraw-Hill School Pub Co
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Macroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506756Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Economics Today and Tomorrow, Student Edition
Economics
ISBN:9780078747663
Author:McGraw-Hill
Publisher:Glencoe/McGraw-Hill School Pub Co
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
Macroeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning