Hello! I just need help on how to do the problem. I would like a very similar problem with step by step instructions and explanations since I don’t want to cheat but I do want and need to understand how to solve this problem.

Hello! I Just Need Help On How To Do The Problem. I Would Like A Very Similar Problem With Step By Step

Answers

Answer 1

Bank will have $6000 excess reserves after a check for $10,000 was drawn and cleared against it.

The Reserve Bank of India

The Reserve Bank of India (RBI) is India's central bank and regulatory body in charge of overseeing the Indian banking system. The Ministry of Finance of the Government of India owns it. It is in charge of the Indian rupee's control, issuance, and supply.

When the deposit fall by $10,000, then the total checkable deposit become $1,20,000.

As the legal reserve ratio is 20%.

The reserve before check was drawn is cleared is $40,000.

The reserve after check was drawn is $40,000-$10,000=$30,000

The reserve that bank must keep is =120000*20%=$24,000

The excess reserve with bank is =$30000-$24000=$6000

Therefore, the correct answer is required reserves = $6000.

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