Problem 2.12. Excess reserve Consider a central bank policy to maintain 9 percent reserves on deposits held by commercial banks. National Bank currently has Rs 10 million in deposits and holds Rs 1 million in reserves at the central bank. a. What is the excess reserve ratio? What will be the requirements if the bank is to add Rs 500,000 additional deposits?

Problem 2.12. Excess reserve Consider a central bank policy to maintain 9 percent reserves on deposits held by commercial banks. National Bank currently has Rs 10 million in deposits and holds Rs 1 million in reserves at the central bank. a. What is the excess reserve ratio? What will be the requirements if the bank is to add Rs 500,000 additional deposits?

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter25: Money Creation

Section: Chapter Questions

Problem 18SQ

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