Author Question: The First National Bank of Townville has 125,000 in U.S. government securities, 200,000 in savings ... (Read 15 times)

james9437 · **on:** Jun 29, 2018

The First National Bank of Townville has 125,000 in U.S. government securities, 200,000 in savings accounts, 300,000 in checking accounts, 50,000 in its reserve account at the Fed, 10,000 of currency in its vault, and loans of 250,000.

What is the amount of its reserves?

Question 2

Let's assume producers in Canada can make 200 units of beef or 50 units of oranges, and U.S. producers can make 50 units of beef or 200 units of oranges per time period. Which country faces the lowest opportunity cost of producing oranges?

A) The U.S.
B) Canada
C) Both countries
D) Neither country

angrybirds13579 · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

Reserves include the bank's deposit in its reserve account at the Fed and the currency in its vault. Therefore, the First National Bank of Townville has 50,000 + 10,000 = 60,000 in reserves.

Answer to Question 2

A