Create an Account

Already have account?

Forgot Your Password ?

Home / Questions / Local Bank currently has $300 million in transaction deposits on its balance sheet The cur...

Local Bank currently has $300 million in transaction deposits on its balance sheet The current reserve requirement is 12 percent but the Federal Reserve is decreasing this requirement to 10 percent

Local Bank currently has $300 million in transaction deposits on its balance sheet. The current reserve requirement is 12 percent, but the Federal Reserve is decreasing this requirement to 10 percent. A. Show the balance sheet of the Federal Reserve and National Bank if National Bank converts all excess reserves to loans, but borrowers return only 60 percent of these funds to National Bank as transaction deposits. What will be: The new amount of transaction deposits? The new amount of reserve deposits at the fed? The new amount of loans? Show the balance sheet of the Federal Reserve and National Bank if National Bank converts 80 percent of its excess reserves to loans and borrowers return 70 percent of these funds to National Bank as transaction deposits. The new amount of transaction deposits? The new amount of reserve deposits at the fed? The new amount of loans ?

 

Aug 15 2020 View more View Less

Answer (Solved)

question Subscribe To Get Solution

Related Questions