Assume that the following data describes the condition of, Ask an Expert

Economics

Assume that the following data describes the condition of the commercial banking system

Total Reserves $100 Billion
Transactions Deposits $800 Billion
Cash held by public $100 Billion
Reserve requirements 0.125

(a) Are the banks fully utilizing their lending capacity? describe.
(b) What would the lending capacity of the banking system be after such a portfolio switch?
(c) How large would the money supply be if the banks fully utilized their lending capacity?

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M970596

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