How much would the economy funds provide increase

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Reference no: EM1344107

Q. Assume which the T-account for Nan Bank Inc. is as follows:

Assets Liabilities

Reserves $100,000

Loans $400,000 Deposits $500,000

If the Bank of Canada needs banks to hold 5 percent (%) of deposits as reserves, how much in excess reserves does Nan Bank Inc. now hold?

Assume which all other banks hold only the required amount of reserves. If Nan Bank Inc. decides to reduce its reserves to only the required amount, by how much would the economy's funds provide increase?

Reference no: EM1344107

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