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maksim [4K]
2 years ago
13

A commercial bank has excess reserves of $500 and a required reserve ratio of 20%; it grants a loan of $1000 to a borrower. If t

he borrower writes a check for $1000 which is deposited in another commercial bank, the first bank will be short of reserves, after the check has been cleared, in the amount of:
Business
1 answer:
koban [17]2 years ago
8 0

Answer:

$500

Explanation:

Calculation for amount that the first bank will be short of reserves, after the check has been cleared

Using this formula

Reserve shortage=Loan granted(check)-Excess reserves

Let plug in the formula

Reserve shortage=$1,000-$500

Reserve shortage=$500

Therefore the first bank will be short of reserves, after the check has been cleared, in the amount of:$500

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Which of these is an example of a financial asset?
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3 0
3 years ago
Calculating Average Operating Assets, Margin, Turnover, and Return on InvestmentEast Mullett Manufacturing earned operating inco
gladu [14]

Answer:

1. $425,000

2. 10.78%

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Explanation:

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3. For turnover:

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4. For Return on investment:

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3 years ago
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