Refer to the T account for an imaginary bankAssetsLiabilitiesReserve $1,000 Deposits $15,000Loan $14,000Based on the information given in the tablecalculate the following:1. If the reserve ratio is 10% then calculate anyexcess resServe.2. If the bank decides to loan out the excessreserve then how much money supply thatexcess reserve can create?

Assets Liabilities Reserve$1000 Deposits $15000 Loan $ 14000 In the table of an…

Answered: 1. If the reserve ratio is 10% then…

1. If the reserve ratio is 10% then calculate any excess reserve. 2. If the bank decides to loan out the excess reserve then how much money supply that excess reserve can create?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Refer to the T account for an imaginary bank
Assets
Liabilities
Reserve $1,000 Deposits $15,000
Loan $14,000
Based on the information given in the table
calculate the following:
1. If the reserve ratio is 10% then calculate any
excess resServe.
2. If the bank decides to loan out the excess
reserve then how much money supply that
excess reserve can create?

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