A bank's assets consist of $500,000 in total reserves, $1,600,000 in loans, and a building worth $1,200,000 . Its liabilities and capital consist of $2,000,000 in demand deposits and $1,300,000 in capital. If the required reserve ratio is 30 percent, what is the level of the bank's excess reserves? How much money could the excess reserves be used to create in the banking system as a result?
a. zero; zero
b. $50,000; $50,000
c. $50,000; $500,000
d. The bank has insufficient reserves to meet its reserve requirements.
d
Economics
You might also like to view...
About two-thirds of black births are to unwed mothers
Indicate whether the statement is true or false
Economics
If the rate of inflation in the United States rises relative to the rate of inflation in foreign nations, U.S. net exports will tend to ____, causing the exchange value of the U.S. dollar to ____
a. rise; rise b. rise; fall c. fall; rise d. fall; fall
Economics