Travelers’ Checks are first counted in this official measure of the money supply. M2 M1 M3...
Travelers’ Checks are first counted in this official measure of the money supply.
|
M2 |
||
|
M1 |
||
|
M3 |
||
|
M0 |
A bank currently has $250,000 worth of deposits in their vault. If the Required Reserve Ratio in the economy is 5%, how much money is this bank able to loan to borrowers?
|
$12,500 |
||
|
$200,000 |
||
|
$237,500 |
||
|
$15,000 |
|
Assets |
Liabilities |
|
Reserves = $20,000,000 |
Deposits = $100,000,000 |
|
Loans = $80,000,000 |
If this bank is holding the minimum amount of reserves required by the Federal Reserve (“fully loaned up”), what is the value of the Required Reserve Ratio?
|
10% |
||
|
20% |
||
|
15% |
||
|
5% |
Homework Answers
1. The travellers checks are considered in the M1 money supply.
M1= Currency in circulation+Checkabale deposits+Travellers check.
M2= M1+Savings deposits with the banks+Small denomination time deposits.
M3= M2+ Large denomination time deposits.
Ans: M1.
2. Every commercial bank in the country want to keep a certain percentage of their deposits as reserves with the Central bank. This is called as the reserves , the required reserve ratio is set by central bank itself to control the money supply in the economy.
.
.
.
.
Ans: 
.
3. Yes , it is obviously 20 percent of the number and the required reserve ratio is 20%.
.
.
Ans: 20 percent.
Add Answer to:
Travelers’ Checks are first counted in this official measure of
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If this balance sheet depicts the only bank in the economy, how large is M1? ...
If this balance sheet depicts the only bank in the economy, how
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e-$65 million
Given the balance sheet above and assuming a required reserve
ratio of 20%, which of the following accurately describes the
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a-it is failing to meet its reserve
requirement
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reserves
c-it is meeting its reserve requirement, and has $5 million in
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If this balance sheet depicts the only bank in the economy, how
large is M1?
a-$5 million
b-$10 million
c-$15 million
d-$60 million
e-$65 million
Given the balance sheet above and assuming a required reserve
ratio of 20%, which of the following accurately describes the
bank's situation?
a-it is failing to meet its reserve
requirement
b-it is just meeting its reserve requirement, but has no excess
reserves
c-it is meeting its reserve requirement, and has $5 million in
excess...
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