brave ones,
if any of you could help me understand the answer for the economics question
volume 2
exam 3 PM
Q.153
…..i’ve quit this one…作者: ayodayo 时间: 2013-4-1 12:44
They have $50m deposits and $41 of loans. From the $50m deposits required reserve is 15% which is $7.5m, emaning they have excess reserves of $9 $7.5 = $1.5m so they can make additional loans of $1.5m.
Selling short term securities hasn’t given them any extra reserves from which to make loans with, it is considered essentially to be cash, so you do not have to include it in your calculation, as it’s already there.作者: giants2010 时间: 2013-4-1 12:44
many thanks kurupt!!!!
i was offside with the last one…ok, the sale of treasuries didn’t imply a deposit, thus not an incremental to be considered. got it…sometimes my “non native english status” strikes…
tigas…the economist who hates economics
