What is the level of excess reserves


Problem

Assume that the banking system has total reserves of $480 billion.

Assume also that required reserves are 40 percent and that banks do not hold any excess reserves and households hold no currency.

Now suppose that the Fed decreases the required reserves to 32.

What is the level of excess reserves? Make sure to include a negative sign if necessary.

Request for Solution File

Ask an Expert for Answer!!
Macroeconomics: What is the level of excess reserves
Reference No:- TGS03242787

Expected delivery within 24 Hours