The friendly National Bank holds $50 million in reserves at its Federal Reserve District Bank. The...

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The friendly National Bank holds $50 million in reserves at its Federal Reserve District Bank. The required reserves ratio is 12 percent.a. If the bank has $600 million in deposits, what amount of vault cash would be needed for the bamk to be in compliance with the required reserves ratio?b. The Friendly National Bank holds $10 million in vault cash, determine the required reserves ratio that would be needed for the bank to avoid a reserves deficitc. If the Friendly National Bank experiences a required reserves deficit, what actions can it take to be in compliance with the existing required reserves ratio?

Robert · Accepted Answer

The friendly National Bank holds $50 million in reserves at its Federal Reserve District Bank. The required 
reserves ratio is 12 percent. 
a. If the bank has $600 million in deposits, what amount of vault cash would be needed for the bank to be in 
compliance with the required reserves ratio? 
Reserve requirement = Deposits x Required reserve ratio 
 $600,000,000 x 12% 
 $72,000,

The friendly National Bank holds $50 million in reserves at its Federal Reserve District Bank. The required reserves ratio is 12 percent.a. If the bank has $600 million in deposits, what amount of...

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