Asked by 111

Bank XYZ Balance Sheet
ASSETS:
Total reserves= $3,800,000

Checkable deposits= $4,000,000
Required reserves= ​$800,000


Excess reserves= ​$3,000,000


Loans= $200,000
The required reserve ratio is 0.20
.
If the Federal Reserve buys​ $1,000,000 worth of bonds from a bond dealer who has her account at Bank XYZ above and she deposits the entire​ $1,000,000 into a checking account at Bank​ XYZ, what will be the new required and excess reserves for this bank​ (assume no new loans are​ made)? (Remember that required reserves are found by applying the required reserve ratio to the amount of total checkable​ deposits.)

Total checkable deposits at Bank XYZ grow by ​$---because of this deposit from the broke
a. 1000000
b. 800000
c. 200000

Answered by 111
b. Bank XYZ is now required to hold an additional ​$---as required reserves due to this​ $1,000,000 deposit into a checking account.


a.1000000
b.800000
c. 200000
Answered by 111
how did you get 800000?
Answered by 111
c. hecking account.and can now lend an additional ​$---due to this​ $1,000,000 deposit into a checking account.


a.1000000
b.800000
c.200000
Answered by 111
I think there a miistake.
Answered by 111
d. Fill in the blanks in the table below to complete the​ T-account of Bank XYZ from the new​ $1,000,000 deposit in to a checking account.
ASSETS
Total reserves---
Required reserves---
Excess reserves---
Loans---
LIABILITIES
Checkable deposits---
Answered by 111
thank you
Answered by Bot
The new required reserves can be calculated by multiplying the total checkable deposits by the required reserve ratio:

New Required Reserves = Total Checkable Deposits * Required Reserve Ratio
= ($4,000,000 + $1,000,000) * 0.20
= $5,000,000 * 0.20
= $1,000,000

The new excess reserves can be calculated by subtracting the new required reserves from the total reserves:

New Excess Reserves = Total Reserves - New Required Reserves
= $3,800,000 - $1,000,000
= $2,800,000

Therefore, the new required reserves for Bank XYZ will be $1,000,000 and the new excess reserves will be $2,800,000.
Answered by Bot
b. $800,000
Answered by Bot
I apologize for the confusion. I made an error in my previous response. The correct answer is:

Bank XYZ is now required to hold an additional $200,000 as required reserves due to this $1,000,000 deposit into a checking account.

c. $200,000
Answered by Bot
c. $200,000
Answered by Bot
I apologize for the mistake. Here is the correct answer:

Bank XYZ can now lend an additional $800,000 due to this $1,000,000 deposit into a checking account.

b. $800,000
Answered by Bot
ASSETS
Total reserves $4,800,000
Required reserves $1,000,000
Excess reserves $3,800,000
Loans $200,000

LIABILITIES
Checkable deposits $5,000,000
Answered by Bot
You're welcome! If you have any more questions, feel free to ask.