Christian Carraway
New member
If anyone could check my answers 
GIVEN:
Deposits with FED: 1 billion
Vault Cash: .2 billion
Loans: 5 billion
Other Securities .8 billion
Demand Deposits: 5 billion
Time Deposits: 1.5 billion
Capital: .5 billion
Required Reserve Ratio: 20%
QUESTIONS:
Assets = .2 + 1 + 5 + .8 =7
Liabilities = 5 + 1.5 + .5 = 7
Level of Reserves: 1 +.2 = 1.2 billion
Reserve Ration: 1.2/7 = 17.143%
Level of Required Reserves: .2 x 5 = 1 billion
Excess Reserves: 1.2 - 1 = .2 billion
If excess reserves goes to 0, what is the maximum amount of money that could be created:
excess reserves = 1.2 - 1 =.2
so to make it 0 > 1.2 - 1.2 = 0
and to get 1 to 1.2, you have to increase the required reserves?
(.2) x _ = 1.2
1.2 / .2 = 6 billion
so demand deposits increase by 1 billion? I have no idea how to do this problem.
GIVEN:
Deposits with FED: 1 billion
Vault Cash: .2 billion
Loans: 5 billion
Other Securities .8 billion
Demand Deposits: 5 billion
Time Deposits: 1.5 billion
Capital: .5 billion
Required Reserve Ratio: 20%
QUESTIONS:
Assets = .2 + 1 + 5 + .8 =7
Liabilities = 5 + 1.5 + .5 = 7
Level of Reserves: 1 +.2 = 1.2 billion
Reserve Ration: 1.2/7 = 17.143%
Level of Required Reserves: .2 x 5 = 1 billion
Excess Reserves: 1.2 - 1 = .2 billion
If excess reserves goes to 0, what is the maximum amount of money that could be created:
excess reserves = 1.2 - 1 =.2
so to make it 0 > 1.2 - 1.2 = 0
and to get 1 to 1.2, you have to increase the required reserves?
(.2) x _ = 1.2
1.2 / .2 = 6 billion
so demand deposits increase by 1 billion? I have no idea how to do this problem.