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zzz [600]
3 years ago
10

Suppose a banking system has $100,000 in deposits, a required reserve ratio of 25 percent, and total bank reserves for the whole

system of $25,000. Then the potential deposit creation for the whole system is equal to:
Business
1 answer:
scoundrel [369]3 years ago
8 0

Answer:

$0

Explanation:

Given that,

Deposits = $100,000

Required reserve ratio = 25 percent

Total bank reserves = $25,000

Required reserve ratio refers to the ratio of deposits that are kept with the federal reserve.

Required reserves:

= Deposits × Required reserve ratio

= $100,000 × 0.25

= $25,000

Excess reserves:

= Total reserves - Required reserves

= $25,000 - $25,000

= $0

So, there is no excess reserves in this economy.

Money multiplier:

= 1/Required reserve ratio

= 1/0.25

= 4

Therefore, the total money creation potential of this deposit is zero.

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Under the perpetual inventory system, in addition to making the entry to record a sale, a company would debit Inventory and cred
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Answer:

The journal entry is shown below:

Explanation:

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Khi nào bán hết 1 tỷ gói mè
jeyben [28]
I’m sorry I don’t understand this language
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Publicity is part of a company's
Verdich [7]

Answer:

promotion mix.

Explanation:

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3 years ago
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Answer:

a decrease in the required reserve ratio

Explanation:

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Money supply will increase when the reserve ratio for commercial banks is decreased. This means less of their funds is required to be witheld from the public.

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