Bank reserves can be viewed as:
a. Profitable assets in a bank's portfolio.
b. Taxes on profits.
c. Assets that all banks should have in excess, if they want relatively high profits and relatively low risks.
d. All the above.
Question 2
Assume that the central bank increases the reserve requirement. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and net nonreserve-related international borrowing/lending in the context of the Three-Sector-Model?
a. The real risk-free interest rate rises, and net nonreserve-related international borrowing/lending becomes more positive (or less negative).
b. There is not enough information to determine what happens to these two macroeconomic variables.
c. The real risk-free interest rate and net nonreserve-related international borrowing/lending remain the same.
d. The real risk-free interest rate rises, and net nonreserve-related international borrowing/lending becomes more negative (or less positive).
e. The real risk-free interest rate falls, and net nonreserve-related international borrowing/lending becomes more negative (or less positive).
A typical bank statement.
Example of Reconciling a Bank Statement Cont.
Reserves can work for both fish and fishers
Vast reserves of shale gas can be recovered through formation fracturing (“fracking”)
World Crude Oil Production and Reserves (Billions of Barrels)
Raman has a line of credit loan with the ICICI bank. The initial loan balance was $72000.00. ...