08 Jun Question Module 5 Homework
Question
Module 5 Homework
1. Explain the structure and function of the Federal Reserve
System.
2. You are the Federal Reserve Police and you go into Uckville
Bank. When you check the vault you see $2.5 million. The reserve
requirement is 8.0% and on the books are $28.25million in
outstanding checkable deposits.
a. By how much more in checkable deposits can Uckville expand?
b. What are the excess reserves?
c. Now make up your own Federal Reserve Police problem and
solve it. Show work.
3. How the Reserve Requirement Ratio (RRR) is essentially the
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