How much excess reserve does the bank have

Reference no: EM133657261

QUESTION: The Sask Bank has $20 million deposits and $5 million (actual) reserves. Assume that the bank's desired reserve ratio is 20 percent.

a. How much excess reserve (actual minus desired) does the bank have?

b. What is the deposit multiplier?

c. If the bank lends out all its excess reserves, what is the maximum amount that money supply could increase?

Reference no: EM133657261

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