assignment 8 - Econ 350 Winter 2012 Kenny Christianson...

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Econ 350 Kenny Christianson Winter 2012 due: January 24, 12:00 noon ASSIGNMENT EIGHT 1. From the data provided in the notes to Class 12, answer the following questions: a. Of the total number of commercial banks, what percentage are members of the Federal Reserve System? Member total is 2378, commercial banks total is 7049, so 2378/7049*100%=33.7% b. Of the total number of commercial banks that are members of the Federal Reserve, what percentage have national charters? What percentage have state charters? National charters total is 1521, total member is 2378 so 1521/2378*100%= 64.0% State charters total is 857, total member is 2378, so 857/2378*100%= 36% 2. Assume that the Fed purchases a security for $10,000 from FirstBank. Also assume that the reserve ratio is 0.2 (20%). FirstBank lends its excess reserves to Betty, who does her banking at SecondBank. SecondBank lends its excess reserves to Charlie, who does his banking at ThirdBank. ThirdBank lends its excess reserves to Donna, who does her banking at FourthBank.
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