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Suppose That the Reserve Ratio Is 6 Percent, and Applies

question 6

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Suppose that the reserve ratio is 6 percent, and applies only to checkable deposits.A bank has noncheckable time deposits of $300 million, checkable deposits of $100 million, and reserves of $8 million.What are the excess reserves of this bank?


Definitions:

Leisure

Time spent away from work and essential domestic activities, often used for relaxation, hobbies, and personal enjoyment.

Marginal Revenue Product Curve

A graphical representation that shows the additional revenue generated from deploying one more unit of a specific resource or input, holding all other factors constant.

Variable Capital

The portion of capital represented by expenditures on items such as wages, materials, and fuel, which vary directly with the level of production.

Wage Rate

The wage rate is the amount of compensation a worker receives per unit of time worked, often expressed per hour or per year.

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