How much will bank b keep as required reserves at a minimum

Reference no: EM13218533

Consider a bank that receives an initial deposit of $1,000 and loans out the maximum from this that it can. This in turn is deposited into a second bank (which may technically be itself, but that doesn't change anything), which then loans out the maximum it can, which is deposited in a third bank, and so forth. Assume the reserve requirement is 10%. 1. Under these assumptions, if a new checkable deposit of $1,000 is made in Bank A, a. how much will Bank A keep on hand in the form of required reserves, at a minimum? b. how much will Bank A lend out, at a maximum? (In other words, what amount of the deposit will constitute excess reserves?) c. how much will be deposited in Bank B, at a maximum? d. how much will Bank B keep as required reserves, at a minimum? e. how much will Bank B lend out, at a maximum? f. how much will be re-deposited in Bank C, at a maximum?

Reference no: EM13218533

Questions Cloud

Sketch the output signal waveform : Assume that in addition to the sine-wave signal you have a dc reference voltage of 1.5 V available. Sketch the output signal waveform.

How much pat can recover from harry in monetary damages : Discuss how much, if anything, Pat can recover from Harry in monetary damages - Pat is able to find another job that nets a profit of $4,200 during that same time that Harry's house was to be painted.

Find the voltage gain realized : A transconductance amplifier with Ri = 2 kΩ, Gm = 40 mA/V , and Ro = 20kΩ is fed with a voltage source having a source resistance of 2kΩ and is loaded with a 1kΩ resistance. Find the voltage gain realized (from the source internal voltage to the o..

Use the bounce diagram to plot : The line is terminated in a load RL = 25 ohm. Use the bounce diagram to plot V(t) at a point midway along the length of the line from t = 0 to t = 25 ns.

How much will bank b keep as required reserves at a minimum : Consider a bank that receives an initial deposit of $1,000 and loans out the maximum from this that it can. This in turn is deposited into a second bank (which may technically be itself, but that doesn't change anything), which then loans out the ..

What is the effect of a frequency difference : What is the effect of a frequency difference between the carrier and local oscillator on output quality? Show mathematically.

Calculate the maximum power : Calculate the maximum power that can be sent through an a=2cm , b=1cm air-filled waveguide at 12 GHz such that dielectric breakdown does not occur. Assume that the dielectric strength of air at atmospheric pressure is 3x10^6 [V/m]

Explain how each limits power of the money-creation process : The money-creation process we saw in class, and which is described by the money multiplier formula, is a heoretical maximum or "best case" scenario. In reality, there are two factors which limit the precision of the Fed's control of the money supp..

What is the maximum amount wildcat would pay for the test : Wildcat Co. has to decide whether or not to drill an oil well. It has $100 current income. Drilling would cost $100; if oil were struck, the company would receive $200 for the oil. If the field is dry, nothing is recovered.

User Account

All Pages