Question

Suppose Robina Bank receives a deposit of $53,589 and the reserve requirement is 5%. Answer the following questions using this information. (Round your answers to two decimal places.)

1. What is the amount that Robina Bank must keep on hand as required by the Federal Reserve (Fed)?

2. What is the amount that Robina Bank will have in excess reserves from this initial deposit?

3. What is the maximum amount of new money created by the banking system from this one deposit?

Answer 1

For number 3. you must use what you got from number 2 then divide by the percentage

Step-by-step explanation

The number you got from #2 then divide by the 5%