2 The reserve requirement. Complete the following information and write appropriate title or answe on each line. Assets Required Reserves Excess Reserves Securities Loans Total Assets $60 $0 $80 100 Required Reserves Excess Reserves Securities Loans Total Assets $240 Balance Sheet for Banking System Habilities 100 Deposits Net Worth Total Liabilities and Net Worth 2.1 Based on the balance sheet, the initial reserve requirement is 60. 2.2 Suppose the Fed lowers the reserves does this create?e reserve requirement by 0.05. How many dollars of excess 2.3 What is the additional lending capacity due to the change in the reserve requirement? 2.4 Reconstruct the Balance Sheet for Banking System with changes. New Balance Sheet for Banking System (3 Deposits Net Worth Total Liabilities and Net Worth 4240 2.5 What is the expansion of the Money Supply? 2.6 Loans have gone up by. $0 $240 _$0 -

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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M1

1
t
2 The reserve requirement. Complete the following information and write appropriate title or answers
on each line.
Assets
Required Reserves $60
Excess Reserves
_$0
Securities
$80
Loans
Total Assets
100
Required Reserves
Excess Reserves
Securities
$240
Loans
Total Assets
63
2.1 Based on the balance sheet, the initial reserve requirement is 60.
2.2 Suppose the fed lowers the reserve requirement by 0.05. How many dollars of excess
reserves does this create?
$0
Balance Sheet for Banking System
Lrabilities
2.3 What is the additional lending capacity due to the change in the reserve requirement?
2.4 Reconstruct the Balance Sheet for Banking System with changes.
New Balance Sheet for Banking System
Deposits
80
Deposits
100
Net Worth
Total Liabilities and Net Worth
$240
Net Worth
Total Liabilities and Net Worth
$0
$240
2.5 What is the expansion of the Money Supply?
2.6 Loans have gone up by.
_$0
Transcribed Image Text:1 t 2 The reserve requirement. Complete the following information and write appropriate title or answers on each line. Assets Required Reserves $60 Excess Reserves _$0 Securities $80 Loans Total Assets 100 Required Reserves Excess Reserves Securities $240 Loans Total Assets 63 2.1 Based on the balance sheet, the initial reserve requirement is 60. 2.2 Suppose the fed lowers the reserve requirement by 0.05. How many dollars of excess reserves does this create? $0 Balance Sheet for Banking System Lrabilities 2.3 What is the additional lending capacity due to the change in the reserve requirement? 2.4 Reconstruct the Balance Sheet for Banking System with changes. New Balance Sheet for Banking System Deposits 80 Deposits 100 Net Worth Total Liabilities and Net Worth $240 Net Worth Total Liabilities and Net Worth $0 $240 2.5 What is the expansion of the Money Supply? 2.6 Loans have gone up by. _$0
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