Given an initial deposit of $200, and assuming that required reserve ratio equals 5%, and that bank customers do not hold any currency, fill out the following chart for three rounds of deposits. Round # Deposits Required Reserves Excess Reserves Loans 1 $200 _______ _______ _______ 2 _______ _______ _______ _______ 3 _______ _______ _______ _______ If the Auraria Campus Bank borrows $10,000 from the Fed, how much can this bank lend out to its customers? What three actions could the Fed initiate to motivate the Bank of Auraria to make less loans, and thus, enable the Fed to decrease the growth rate of the nation’s money supply?
Given an initial deposit of $200, and assuming that required reserve ratio equals 5%, and that bank customers do not hold any currency, fill out the following chart for three rounds of deposits. Round # Deposits Required Reserves Excess Reserves Loans 1 $200 _______ _______ _______ 2 _______ _______ _______ _______ 3 _______ _______ _______ _______ If the Auraria Campus Bank borrows $10,000 from the Fed, how much can this bank lend out to its customers? What three actions could the Fed initiate to motivate the Bank of Auraria to make less loans, and thus, enable the Fed to decrease the growth rate of the nation’s money supply?
Chapter25: Money, Banking, And The Federal Reserve System
Section: Chapter Questions
Problem 14P
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Question
Given an initial deposit of $200, and assuming that
Round # Deposits
1 $200 _______ _______ _______
2 _______ _______ _______ _______
3 _______ _______ _______ _______
- If the Auraria Campus Bank borrows $10,000 from the Fed, how much can this bank lend out to its customers?
- What three actions could the Fed initiate to motivate the Bank of Auraria to make less loans, and thus, enable the Fed to decrease the growth rate of the nation’s money supply?
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