11 1 point Table 30-4 Reserves Loans Bank of Socorro Assets Liabilities $4,800 Deposits 75,200 $80,000 Refer to Table 30-4. Assume the Fed's reserve requirement is 4 percent and all banks besides the Bank of Socorro are exactly in compliance with the 4 percent requirement. Further assume that people hold only deposits and no currency. Starting from the situation as depicted by the T-account, if the Bank of Socorro decides to make new loans so as to end up with no excess reserves, then by how much does the money supply eventually increase? $40,756.98 $40,000.00 $26,666.67 $42,930.49
11 1 point Table 30-4 Reserves Loans Bank of Socorro Assets Liabilities $4,800 Deposits 75,200 $80,000 Refer to Table 30-4. Assume the Fed's reserve requirement is 4 percent and all banks besides the Bank of Socorro are exactly in compliance with the 4 percent requirement. Further assume that people hold only deposits and no currency. Starting from the situation as depicted by the T-account, if the Bank of Socorro decides to make new loans so as to end up with no excess reserves, then by how much does the money supply eventually increase? $40,756.98 $40,000.00 $26,666.67 $42,930.49
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![11 1 point
Table 30-4
Reserves
Loans
Bank of Socorro
Assets
Liabilities
$4,800 Deposits
75,200
$80,000
Refer to Table 30-4. Assume the Fed's reserve requirement is 4 percent and all banks besides the Bank of Socorro are exactly in compliance with the 4 percent requirement. Further assume that people hold
only deposits and no currency. Starting from the situation as depicted by the T-account, if the Bank of Socorro decides to make new loans so as to end up with no excess reserves, then by how much does the
money supply eventually increase?
$40,756.98
$40,000.00
$26,666.67
$42,930.49](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F645f5f13-b198-4aa8-9dad-4f403fda1bca%2Fe7bc2816-1b91-4fe5-9cfe-1e18189a7440%2Fk015edg_processed.png&w=3840&q=75)
Transcribed Image Text:11 1 point
Table 30-4
Reserves
Loans
Bank of Socorro
Assets
Liabilities
$4,800 Deposits
75,200
$80,000
Refer to Table 30-4. Assume the Fed's reserve requirement is 4 percent and all banks besides the Bank of Socorro are exactly in compliance with the 4 percent requirement. Further assume that people hold
only deposits and no currency. Starting from the situation as depicted by the T-account, if the Bank of Socorro decides to make new loans so as to end up with no excess reserves, then by how much does the
money supply eventually increase?
$40,756.98
$40,000.00
$26,666.67
$42,930.49
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