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FromTheMoon [43]
3 years ago
15

Assume that the reserve requirement for the commercial banks is 25%. If the Federal Reserve Banks buy $3 billion in government s

ecurities, the lending ability of the commercial banking system will increase by _____.
Business
1 answer:
faltersainse [42]3 years ago
5 0

Answer:

The lending ability will increase by $2.25 billion.

Explanation:

The reserve requirement is given at 25%.

If federal reserve bank buys $3 billion in government securities, the total reserve will increase by $3 billion.

The excess reserve will be

=Increase in total reserve-required reserve

=$3 billion-25% of $3

=$(3 billion- .25*3) billion

=$(3-0.75) billion

=$2.25 billion

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Answer:

The company paid $278,031

Explanation:

Giving the following information:

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