Question

Suppose the required reserves of the Right Bank in 2016 amounted to​ $1,000. Then​ $1,000 will?...

Suppose the required reserves of the Right Bank in 2016 amounted to​ $1,000. Then​ $1,000 will?

be an asset

be a liability

on the​ Fed's balance sheet and it will?

be an asset

be a liablility

on the Right​ Bank's balance sheet.

Homework Answers

Answer #1

Reserve requirement of the Other Bank in the federal balance sheet would be liability for the Federal Reserve. It will be returned to the bank in different situations.

so it would be liability for Federal Reserve as well.

Correct answer option ( B) it will be a liability.

2.Reserve in the banks case is always a liability because it is the deposited money and bank is going to repay it.

Hence it cannot be termed as asset. Correct answer is option( B) it will be a liability for the commercial banks

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Suppose a bank currently has $150k in deposits and $15k in reserves. The required reserve ratio...
Suppose a bank currently has $150k in deposits and $15k in reserves. The required reserve ratio is 10% (so this bank holds no excess reserves). If there is a deposit outflow for $5k, what would be the bank's resulting reserve ratio? What would it cost the bank in $s to comply if it decided to borrow fed funds from another bank at a fed funds rate of 0.25%? What would be the cost in $s for this bank to comply...
Suppose that the First National Bank has the following balance sheet position and that the required...
Suppose that the First National Bank has the following balance sheet position and that the required reserve ratio is 15 percent. Assets Liabilities Reserves $40 million Deposits $200 million Loans $160 million Bank Capital $20 million Securities $20 million What are the bank's a) required reserves and b) excess reserves? If the bank was hit with a deposit outflow of $20 million, would it have to make an adjustment to the balance sheet? Why or why not? If the bank...
Assume that a bank has on its asset side reserves of 500 and loans of 3000...
Assume that a bank has on its asset side reserves of 500 and loans of 3000 and on its liability side deposits of 3500. Assume that the required reserve ratio is 10 percent. (a) How much is the bank required to hold as reserves given its deposits of 3500? (b) How much are its excess reserves? (c) By how much can the bank increase its loans? (d) Suppose a depositor comes to the bank and withdraws 400 in cash. Show...
This exercise utilizes two balance? sheets, one for the Federal Reserve and one for BHZ? Bank,...
This exercise utilizes two balance? sheets, one for the Federal Reserve and one for BHZ? Bank, a representative member of the banking system. Given the following balance sheet showing the? Fed's initial? position, suppose the Federal Reserve wants to raise bank reserves by ?$100 million by transacting with BHZ Bank. (fill in the blanks) THE FEDERAL RESERVE ?(All values in millions of? dollars) Assets Liabilities and Shareholders' Equity Treasury Bonds 1,100 Reserves 1,300 Other bonds 600 Currency 400 Total Assets...
1. Suppose the ABC bank has excess reserves of $5,000 and outstanding checkable deposits of $100,000....
1. Suppose the ABC bank has excess reserves of $5,000 and outstanding checkable deposits of $100,000. If the reserve requirement is 15 percent, what is the size of the bank's actual reserves? Group of answer choices $5,000. $10,000. $15,000. $20,000. 2. The reserves of a commercial bank consist of: Group of answer choices the amount of money market funds it holds. deposits at the Federal Reserve Bank and vault cash. government securities that the bank holds. the bank's net worth.
1. Supppse Happy Bank starts with $25 billion in bank capital and currently has $50 billion...
1. Supppse Happy Bank starts with $25 billion in bank capital and currently has $50 billion in reserves (the required reserve and excess reserve) the resere requirement is 20 % and excess reserev amoutn to $5 billion. a. What is happy bank's deposit and amount of loans given up? Please contrust basic balance sheet conssiting of deposit, capital, reserve, and loans for happy banks. b. suppose that 8% of the borrows from Happy Bank default and these bank loans because...
9. An increase in the discount rate ________ bank reserves and ________ the money supply if...
9. An increase in the discount rate ________ bank reserves and ________ the money supply if banks respond appropriately to the change in the rate. 22. Typically, a bank's largest asset is its a. reserves. b. holdings of securities. c. deposits of its customers. d. loans.
1. Suppose that the central bank increased bank reserves by $200 and that the required reserve...
1. Suppose that the central bank increased bank reserves by $200 and that the required reserve ratio was 20%. Calculate the overall change in deposits that would result. a $200 b $2,000 c $1,000 d Can not be determined 2. Which of the following represents use of a gold standard in the United States? a The great depression b America since the mid 1970s c d Bretton Woods 3. Keynesian policy recommendations for managing aggregate demand are often called? a...
You are given this balance sheet for a bank. Assets Liabilities Reserves $ 200 Deposits $2,000...
You are given this balance sheet for a bank. Assets Liabilities Reserves $ 200 Deposits $2,000 Loans $ 1,800 The required reserve ratio is 10%. a. How much is its excess reserve? b. Suppose Ms. A deposits $1,000 to her account at this bank. Show the effect of this transaction on the bank’s balance sheet. How much is its excess reserve after the transaction? c. How much will M1 increase when the money creation process (involving the whole banking sector...
A problem bank (Bank A or Bank B) must maintain a 10% required reserve ratio. The...
A problem bank (Bank A or Bank B) must maintain a 10% required reserve ratio. The problem bank has to increase its reserves to meet legal requirements. Use the balance sheet of the bank to show how it can increase its reserves by using itssecurities.(4 points) Bank A Balance Sheet Assets                                      Liabilities                            Reserves            $40 million      Deposits      $500 million Loans              $540 million      Capital        $100 million Securities         $20 million Bank B Balance Sheet Assets                                      Liabilities                            Reserves            $50 million      Deposits      $500 million Loans               $500 million      Capital        $100 million Securities          $50 million