Essay
A bank has reserves of $50, deposits of $100, loans of $20, and government securities of $30. Assume the desired reserve ratio is 20 percent.
a) How much does the bank have in unplanned reserves?
b) What can the bank do with its unplanned reserves? Name two options.
Correct Answer:
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a) The unplanned reserves are $30, equal...View Answer
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Correct Answer:
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