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A bank currently has $100,000 in checkable deposits and $15,000 in actual reserves. if the reserve ratio is 20 percent, the bank has ________ in money-creating potential. if the reserve ratio is 14 percent, the bank has __________ in money-creating potential. -$5,000; $1,000. $20,000; $14,000. $5,000; $1,000. $3,000; $2,100.

Respuesta :

jushmk
Reserve ratio is the ratio of balance held as cash to the depositors' balances. In other words,

Reserve ratio = Cash held as cash/Dopsits

In the current senario;
Deposits = $100,000
Actual reserve = $15,000

For 20% required reserve ratio,
Reserve required = 20/100*100,000 = $20,000. Therefore money creating potential = Actual reserve-Required reserve = 15000-20000 = -$5,000

For 14% required reserve ration,
Reserve required = 14/100*100000 = $14,000. And money-creating potential = 15,000 - 14,000 = $1,000.

The correct answer is the first option: -$5,000; $1,000