Question

If you withdraw $500 from your checking account and the required reserve ratio is 5 percent, then the bank's Instructions: Enter your responses as a whole number, a. total deposits fall by $ b. required reserves fali by $ c. excess reserves fall by $ If you deposit a $200 check in your checking account and the required reserve ratio is 10 percent, then the bank's d. total deposits rise by $ e, required reserves rise by $ f excess reserves rise by $

Answer 1

When $500 is withdrawn from an account with a 5% reserve ratio, the bank's total deposits and excess reserves decrease by $500 and $475 respectively, and required reserves decrease by $25. Depositing a $200 check with a 10% reserve ratio increases total deposits by $200, required reserves by $20, and excess reserves by $180.

Step-by-step explanation:

If you withdraw $500 from your checking account and the required reserve ratio is 5 percent, then the bank's:

• Total deposits fall by $500
• Required reserves fall by $25 ($500 x 0.05)
• Excess reserves fall by $475 ($500 - $25)

If you deposit a $200 check in your checking account and the required reserve ratio is 10 percent, then the bank's:

• Total deposits rise by $200
• Required reserves rise by $20 ($200 x 0.10)
• Excess reserves rise by $180 ($200 - $20)

Answer 2

When you withdraw $500 from your checking account and the required reserve ratio is 5 percent, the total deposits fall by $500, the required reserves fall by $25, and the excess reserves fall by $475. When you deposit a $200 check in your checking account and the required reserve ratio is 10 percent, the total deposits rise by $200, the required reserves rise by $20, and the excess reserves rise by $180.

Step-by-step explanation:

a. total deposits fall by 500.

b. required reserves fall by 25.

c. excess reserves fall by 475.

d. total deposits rise by 200.

e. required reserves rise by 20.

f. excess reserves rise by 180.