The Second National Bank of Townville has $400,000 in checking deposits,
$125,000 in savings deposits, $500,000 in loans, $20,000 in its reserve account
at the Fed, and $5,000 of currency in its vault.
What is the amount of its
reserves?
#Parkin
#11edition #Money #PriceLevel #Inflation #Chapter25
Answer:
ReplyDeleteReserves include the bank's deposit in its reserve account at the Fed and the currency in its vault. Therefore the Second National Bank of Townville has $20,000 + $5,000 = $25,000 in reserves.