All categories

4 years ago

If total deposits in bank A total $15 million and the required-reserve ratio is 10 percent, than excess reserves equal:_______

Business

1 answer:

victus00 [196]4 years ago

7 0

Answer:

$13.5 million

Explanation:

Fractional Banking System- This is banking system where banks are required by the central banking authority to keep a certain percentage of their total deposit as the minimum reserve which they cannot lend out.

The idea behind this requirement is to help manage liquidity risk- a situation where a bank does not have enough cash to meet its deposit customers demand.

Required-reserve ratio: The minimum percentage that banks are required to keep as reserve is known as the required-reserve ratio. In this question, it is given as 10%. Multiply this ratio by the total deposit and you will get the required reserve in dollar amount.

Therefore the required reserve for this bank = 10% ×$15 million= $1.5 million

Excess reserve; Excess reserve is the balance of the total deposit over and above the required reserve. The bank can lend and create loan asset from this balance.

It is calculated as = Total deposit - Required reserve

So we apply this to our question

Excess reserve = $15 million - (10% × $15 million)

= $15 million - $1.5 million

= $13.5 million

You might be interested in

Nature's Garden, a new restaurant situated on a busy highway in Pomona, California, specializes in a chef's salad selling for $7

mestny [16]

Answer:

Nature's Garden

a. Determination of the current average cost per meal:

Variable cost per meal = $3,800 ($4 x 950) based on full capacity

Fixed costs per day = $1,710

Total costs = $5,510

Average cost per meal = $5,510/950 = $5.80

b. Girl Scouts' offer of $150 for 30 girls:

Offered price per person = $5 ($150/30)

Projecting a loss of $0.60 per meal, this gives a total loss of $18 ($0.60 x 30)

Projected revenue from the offer = $150 + $18 = $168

Projected revenue per meal = $168/30 = $5.60

Actual revenue to be received per meal = $5.00

Loss of $0.60

The owner arrived at the $0.60 loss because his total costs per meal was $5.60.

c. Since the variable cost per meal is $4, the restaurant owner could accept the offer if the additional 300 meals will not increase his daily fixed costs due to lack of capacity. If the fixed costs increase with this addition, then it may not be reasonable to accept the offer. Based on this offer, the contribution to defraying fixed costs, given present capacity, is only $0.50 ($4.50 - $4) per meal.

Explanation:

Selling price of chef's salad = $7

Daily fixed costs = $1,710

Variable costs per meal = $4

Meals capacity per day = 950

Average meals = 900

Nature's Garden has a fixed cost of $1,710 based on current capacity of 950 meals per day. The fixed cost may increase with increasing capacity. This fact must be borne in mind when making decisions.

4 0

4 years ago

A "Buy American" provision in the 2009 stimulus bill would ________ consumer surplus and ________ producer surplus for industrie

Neko [114]

Answer:

The correct answer is decrease; increase.

Explanation:

The "Buy American" law was passed in 1933 and established that the US federal government. UU. You must prioritize the purchase of products manufactured in the country. Under certain circumstances, however, the "Buy American" law may not apply when:

material of American origin has an excessive cost;
material of American origin is not available in sufficient quantity or volume;
material of American origin is not in the public interest.

The "Buy American" law may also not apply if the president of the United States or a delegated authority said it on the grounds of reciprocal agreements with other countries defined in the Law on Trade Agreements, the North American Free Trade Agreement (NAFTA) and the World Trade Organization.

7 0

3 years ago

Katy, a manager, is evaluating her team members by rating them from best to worst. This rating is based on their overall perform

grin007 [14]

Answer:

a.The simple ranking method.

Explanation:

From The given scenario is based on the simple Ranking method which is the simplest method of Appraisal under which every employee is compared with the others and ranked from best to worst.

4 0

3 years ago

Pure monopoly refers to Multiple Choice any market in which the demand curve for the firm is downsloping. a standardized product

skelet666 [1.2K]

Answer:

a single firm producing a product for which there are no close substitutes.

Explanation:

A pure monopoly is a single supplier having a market or industry i.e. defined. The firm should be considered as an industry also in this there is no competitor or any subsitution existed. It can be arise at the time when the market share of the one firm is more than 90%

So as per the given situation, the above represent the answer

5 0

3 years ago

The margin of safety is a measure of the distance between budgeted sales and the break-even point. It can be measured in dollars

Rudiy27

Answer:

The correct option is these statements are true

Explanation:

Margin of safety is the measure of the reduction in sales that needs to be recorded before a company makes no profit,invariably the difference the planned sales volume and the sales volume required to break even(makes no profit no loss).

The margin of safety can be expressed in volume,say 100 units of a product,in dollar terms ,say each product sells for $100 each,the margin of safety becomes $10,000($100*100) and can also be expressed in percentage terms depending on the way management wants it stated.

4 0

4 years ago