The First National Bank of Townville has $125,000 in U.S. government securities, $200,000 in savings accounts, $300,000 in checking accounts, $50,000 in its reserve account at the Fed, $10,000 of currency in its vault, and loans of $250,000.
What is the amount of its reserves?
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Answer:
ReplyDeleteReserves include the bank's deposit in its reserve account at the Fed and the currency in its vault. Therefore the First National Bank of Townville has $50,000 + $10,000 = $60,000 in reserves.