1t2 The reserve requirement. Complete the following information and write appropriate title or answerson each line.AssetsRequired Reserves $60Excess Reserves_$0Securities$80LoansTotal Assets100Required ReservesExcess ReservesSecurities$240LoansTotal Assets632.1 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 excessreserves does this create?$0Balance Sheet for Banking SystemLrabilities2.3 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 SystemDeposits80Deposits100Net WorthTotal Liabilities and Net Worth$240Net WorthTotal Liabilities and Net Worth$0$2402.5 What is the expansion of the Money Supply?2.6 Loans have gone up by._$0

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2 The reserve requirement. Complete the following information and write appropriate title or answer on each line. Assets Required Reserves Excess Reserves Securities Loans Total Assets $60 $0 Required Reserves Excess Reserves Securities Loans Total Assets $80 100 $240 63 $0 80 Balance Sheet for Banking System Hrabilities 100 Deposits 2.1 Based on the balance sheet, the initial reserve requirement is 60. 2.2 Suppose the Fed lowers the reserves does this create?serve 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 Deposits Net Worth Total Liabilities and Net Worth Net Worth Total Liabilities and Net Worth $240 2.5 What is the expansion of the Money Supply? 2.6 Loans have gone up by $0 $240 $0 -

2 The reserve requirement. Complete the following information and write appropriate title or answer on each line. Assets Required Reserves Excess Reserves Securities Loans Total Assets $60 $0 Required Reserves Excess Reserves Securities Loans Total Assets $80 100 $240 63 $0 80 Balance Sheet for Banking System Hrabilities 100 Deposits 2.1 Based on the balance sheet, the initial reserve requirement is 60. 2.2 Suppose the Fed lowers the reserves does this create?serve 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 Deposits Net Worth Total Liabilities and Net Worth Net Worth Total Liabilities and Net Worth $240 2.5 What is the expansion of the Money Supply? 2.6 Loans have gone up by $0 $240 $0 -

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter14: Banking And The Money Supply

Section: Chapter Questions

Problem 2.3P

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Below is the balance sheet for a bank. Under "Other" it has listed "$X" just think of this as the dollar amount needed to make the balance sheet balance. It is not important what that value is for this question. AssetsLiabilitiesReserves 42Deposits 245Loans 160 Securities 48Other $X Using the balance sheet above, find the level of required reserves for this bank if the required reserve ratio = 8%(Give answers to 2 decimal places as needed)
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Assets Vault Cash Deposits at Fed Loans Total $50,000 $200,000 $600,000 $850,000 Liabilities and Net Worth First Southern's bank reserves are equal to $ checking deposits, First Southern' would maintain $ reserves over and above the desired amount. Deposits $850,000 Total The increase in the money supply will be $850,000 If First Southern bank wanted to maintain 0.10 of its assets as reserves against as reserves. Therefore, it would have $ as additional If First Southern uses the reserves above the desired level to extend additional loans, the money supply would increase by S If First Southern wanted to maintain 0.05 of its assets as reserves against checking deposits, First Southern' would maintain S as reserves, additional reserves would be $ and the increase in the money supply would be $ if First Southern chooses a desired reserve ratio of 0.05.
Initial deposit is $10,000 Required Reserve Ratio is 20% Calculate: $ Multiplier Required Reserves Excess Reserves
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Initial deposit is $10,000 Required Reserve Ratio is 10% Calculate: $ Multiplier Required Reserves Excess Reserves Potential $ Created
a bank determines that it is prudent to hold $2 for every $100 in deposits. The bank holds desired reserves of $9,000 and surplus reserves of $11,000. What is the bank's desrired reserve ratio and its actual reserves? The Bank's desired erserve ratio is 2 percent. The bank's actual reserves are $_____? Thank you !! z
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Initial deposit is $10,000 Required Reserve Ratio is 20% Calculate: $ Multiplier Required Reserves Excess Reserves Potential $ Created Initial deposit is $10,000 Required Reserve Ratio is lowered to 10% Calculate: $ Multiplier Required Reserves Excess Reserves Potential $ Created