Balance sheet-actual reserves , Basic Statistics

Assignment Help:

(a)   The bank's excess reserves are its actual reserves less required reserves. Actual reserves are given as $450 from its balance sheet. Required reserves are given by the product of the required reserve ratio and demand deposits, i.e., 10% * $5,000 = $500. Thus the excess reserves are equal to $450 - $500 = -$50. This implies that the bank has no excess reserves and even it does not maintain the required reserve ratio.

(b)  The bank can lend an additional amount equal to its excess reserves. But since in this case, there are no excess reserves, the bank cannot lend anything.

 


Related Discussions:- Balance sheet-actual reserves

Interpret predictability and behaviou, Shafts are cut to length by two mach...

Shafts are cut to length by two machines, A and B. Each machine cuts 50 percent of all shafts in approximately the same amount of time. Machine A's shafts are all good, but Machine

Biomechanics , what are the biomechanical techniques for swimming freestyle...

what are the biomechanical techniques for swimming freestyle?

CHI-SQUARE, proof that the square of a normal distribution will give a chi-...

proof that the square of a normal distribution will give a chi-square

Payroll, is about deductions

is about deductions

How to calculate mean?, Mean The mean is commonly the most significant ...

Mean The mean is commonly the most significant of all the numerical measurements used to describe data, and it is what the most people call an average. Example  Find

Calculate the probability, The Stalk Market, an independent grocery chain, ...

The Stalk Market, an independent grocery chain, has been serving and supporting local communities for over 90 years. Its stores offer friendly service and a wide assortment of natu

Analytical approach of strategy, 1. Comment on influence of study design, s...

1. Comment on influence of study design, sampling strategy and scale of measurement of outcome variable, on your choice of analytical approach Study design: the study design i

Sampling, Advantages of sampling over population

Advantages of sampling over population

Job order costing, what are the procedure of job order costing

what are the procedure of job order costing

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd