Answer to Question #37918 in Macroeconomics for Sara Wright
The Fed purchases $12 million in US bonds from a bond dealer and the dealer's bank credits the dealer's account. The required reserve ratio is 13 percent. ......calculate how much will the bank be able to lend to its customers following the Fed's purchase.
I have total Reserves - required Reserves = excess reserves = loans to its customers.......
12 - 1.32 = 10.68 billion.
This came from the "show me how to solve the problem"........But, where does the 1.32 come from?
Can you please help me?
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