1. The reserve requirement is 0 percent on the first $6.0 million in transaction deposits,...
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1. The reserve requirement is 0 percent on the first $6.0 million in transaction deposits, 3 percent on amounts between $6.0 million and $42.1 million, and 10 percent on amounts above $42.1 million The First Bank of Boston has the following assets and liabilities (all amounts in millions of dollars): Assets Reserves Loans Securities 5.0 345.0 70.0 LiabilitiesCapital Transaction deposits Nontransaction deposits Equity capital Calculate the bank's excess reserves. Show your work. 75.0 315.0 30.0 a. Suppose First Bank makes a loan to a customer equal to $0.5 million. Calculate the bank's excess reserves before the customer spends the proceeds of the loan Show your work. b. c. Now suppose the customer spends the proceeds of the loan. Calculate the banks excess reserves. Show your work
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