# econ

posted by .

Suppose the reserve requirement ratio is 20 percent. Assuming no bank holds excess reserves and nobody withdraws cash, a \$10,000 injection of new excess reserves by the Fed can create
A) \$2,000 in new checkable deposits
B) \$10,000 in new checkable deposits
C) \$50,000 in new checkable deposits
D) \$500,000 in new checkable deposits
E) \$50,000 in cash

## Similar Questions

The Norfolk Bank has \$18,000 in excess reservces and the reserve ratio is 20 percent. Which level of checkable deposits and reserves might this bank hold?
2. ### econ.

If the reserve requirement is 20% and a bank doesn't have excess reserves, why would a \$100 deposit lead to a greater than \$100 increase in the money supply. because of the money multiplier. A \$100 deposit (e.g., into a checking account) …
3. ### econ 181

What isthe max amount of new loans that this bank can make?
4. ### intro to economics

Please check my answers and I need help on some of the problems. I'm in a intro to economics course at a university. My professor did not provide a book for this course citing that she rarely had her students use it. So all I have …
5. ### Macroeconomics

If it looks like a bank won't meet the Federal Reserve Bank's reserve requirement, normally it will first turn to the: A) other member banks and borrow at the federal funds rate. B) Fed and borrow at the discount rate. C) open market …
6. ### economics

3. Draw a simple T-account for First National Bank which has \$5,000 of deposits, a required reserve ratio of 10 percent, and excess reserves of \$300. Make sure you balance sheet balances
7. ### Finance

A new bank has vault cash of \$1 million and \$5 million in deposits held at its Federal Reserve District Bank. a. If the required reserves ratio is 8 percent, what dollar amount of deposits can the bank have?
8. ### Finance

Assume a bank has \$5 million in deposits and \$1 million in vault cash. If the bank holds \$1 million in excess reserves and the required reserves ratio is 8 percent, what level of deposits are being held?
9. ### Finance

If the bank holds \$65 million in deposits and currently holds bank reserves such that excess reserves are zero, what required reserves ratio is implied?
10. ### economics

Suppose that the reserve ratio is .25, ad that a bank has actual reserves of \$15,000, loans of \$40,000, and demand deposits of \$50,000. Excess reserves are \$

More Similar Questions