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murzikaleks [220]
2 years ago
7

(Scenario: Assets and Liabilities of the Banking System) According to the Scenario: Assets and Liabilities of the Banking System

, suppose that the reserve ratio is 10 percent when the Federal Reserve sells $25,000 worth of U.S. Treasury bills to the banking system. If the banking system does NOT want to hold any excess reserves, _______ will be _______ the money supply.
Business
1 answer:
Phantasy [73]2 years ago
7 0

If the banking system does NOT want to hold any excess reserves,  $250,000 will be <u>added </u>to the money supply.

<h3>What is an excess reserves?</h3>

Excess reserves is known to be the capital reserves that is said to be held by a bank or financial institution and it is one that is too much or is in excess of what is needed by regulators, creditors, or others.

Since there is  $25,000 worth of U.S. Treasury bills, one will multiply it times 10 = $250,000

Therefore,  If the banking system does NOT want to hold any excess reserves,  $250,000 will be <u>added </u>to the money supply.

Learn more about excess reserves from

brainly.com/question/17099821

#SPJ12

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3 years ago
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Read 2 more answers
Consider a $1,000 par value bond with a 9% annual coupon. The bond pays interest annually. There are 20 years remaining until ma
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