0
   

money and prices

 
 
Reply Wed 22 Jun, 2016 04:35 am
Hey guys Smile I have a question about my homework. It would be nice if someone can help me Smile
Main Street Bank sets its loans on the basis of a 5% reserve requirement and has $100 million cash in its vaults.
(a) What is the maximum amount of loans the bank can make?
(b) If the bank has made loans of $50 million to real estate firms and is required to keep a 50% reserve requirement against such loans, how does this change your answer?

Sooo, in a) we have to use the money multiplier to calculate how much money are created by given RRR 5%, but I'm not sure what exactly to do in b)
Thank you
  • Topic Stats
  • Top Replies
  • Link to this Topic
Type: Question • Score: 0 • Views: 514 • Replies: 0
No top replies

 
 

 
  1. Forums
  2. » money and prices
Copyright © 2026 MadLab, LLC :: Terms of Service :: Privacy Policy :: Page generated in 0.03 seconds on 04/26/2026 at 06:39:05