What is the size of the banks actual reserves

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1. Suppose that Serendipity Bank has excess reserves of \$8,000 and checkable deposits of \$150,000.

If the reserve ratio is 20 percent, what is the size of the bank's actual reserves? \$__________.

2. Third National Bank has reserves of \$20,000 and checkable deposits of \$100,000. The reserve ratio is 20 percent. Households deposit \$5,000 in currency into the bank and that currency is added to reserves.

What level of excess reserves does the bank now have? \$_________.

3. Suppose that Third National Bank has reserves of \$20,000 and checkable deposits of \$100,000. The reserve ratio is 20 percent. The bank sells \$5,000 in securities to the Federal Reserve Bank in its district, receiving a \$5,000 increase in reserves in return.

What level of excess reserves does the bank now have? \$____________.

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