Question

A bank has $50,000 in checking account deposits and loans of $49,000. Of the $49,000 loaned out, $43,000 remains in the checking accounts of the loan recipients. The bank has $50,000 cash on hand, and the reserve requirement is 25%. The amount of its required reserves equals:

a)

$50,000.

b)

$23,250.

c)

$27,000.

d)

$26,750.

Answer 1

The required reserves are calculated by multiplying the total checking account deposits by the reserve requirement percentage. The bank's required reserves amount to $12,500, which is not listed in the answer choices, indicating a possible error in the question's options.

Step-by-step explanation:

To determine the bank's required reserves, we simply apply the reserve requirement percentage to the total amount of checking account deposits:

Total checking account deposits = $50,000

Reserve requirement = 25%

The calculation would then be:

Required reserves = Total checking account deposits × Reserve requirement

Required reserves = $50,000 × 0.25

Required reserves = $12,500

Thus, the correct amount of required reserves for the bank is $12,500. Answer choices a), b), c), and d) do not include this value, which suggests that there might be a typo or mistake in the question options provided. Based on the information given and the typical calculation for required reserves in a bank, the answer should be $12,500.

Answer 2

It would be c bc it subtracts 5000 with 49000 then divide