Suppose that National Bank of Guerneville has $35 million in checkable? deposits, Commonwealth Bank has $43 million in checkable? deposits, and the required reserve ratio for checkable deposits is? 10%. If National Bank of Guerneville has? $4 million in reserves and Commonwealth has? $5 million in? reserves, how much in excess reserves does each bank have?
National Bank of Guerneville has:
?$0.5 million in excess reserves.
Commonwealth Bank has:
?$0.7 million in excess reserves.
1) Now suppose that a customer of National Bank of Guerneville writes a check for $2 million to a real estate broker who deposits the check at Commonwealth. After the check? clears, how much in excess reserves does each bank? have?
National Bank of Guerneville has
?$−1.3 million in excess reserves.
Commonwealth Bank has?
Please show how to get -1.3 and solve for Commonwealth Bank.