How much in excess reserves does this bank hold

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Reference no: EM131169213

Consider the following simplified balance sheet for a bank. (2 pts.) Assets Liabilities Reserves $1.5 million Loans $8.5 million Deposits 10 million

(a) If the required reserve ratio is 10%, how much in excess reserves does this bank hold?

(b) If the bank makes the maximum amount loan with excess reserves, how much money will be created? (Hint: You may want to use the money multiplier.)

Reference no: EM131169213

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