A2-2. Suppose the consolidated balance sheet (T-account) of the banking system for an economy with a regulated reserve ratio of 10% is given below. If the regulator decreases the reserve ratio to 8%, the money supply will increase by 250. [Hint: Assume that the public holds all its money in the form of bank deposits.] Assets: Liabilities: Reserves 100 Deposits 1000 Government Bonds 300 Loans Outstanding 800 Capital 1200 200 Total Total 1200
A2-2. Suppose the consolidated balance sheet (T-account) of the banking system for an economy with a regulated reserve ratio of 10% is given below. If the regulator decreases the reserve ratio to 8%, the money supply will increase by 250. [Hint: Assume that the public holds all its money in the form of bank deposits.] Assets: Liabilities: Reserves 100 Deposits 1000 Government Bonds 300 Loans Outstanding 800 Capital 1200 200 Total Total 1200
Chapter1: Making Economics Decisions
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![A2-2. Suppose the consolidated balance sheet (T-account) of the banking system for an economy with a
regulated reserve ratio of 10% is given below. If the regulator decreases the reserve ratio to 8%, the
money supply will increase by 250. [Hint: Assume that the public holds all its money in the form of
bank deposits.]
Assets:
Liabilities:
Reserves
100 Deposits
1000
Government Bonds
300
Loans Outstanding
800 Саpital
200
Total
1200
Total
1200](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd09ce624-2169-4bff-a0af-8a5e7d3988c7%2F3b74d173-a50c-4148-b549-73ee50797168%2Fmp4l96d_processed.png&w=3840&q=75)
Transcribed Image Text:A2-2. Suppose the consolidated balance sheet (T-account) of the banking system for an economy with a
regulated reserve ratio of 10% is given below. If the regulator decreases the reserve ratio to 8%, the
money supply will increase by 250. [Hint: Assume that the public holds all its money in the form of
bank deposits.]
Assets:
Liabilities:
Reserves
100 Deposits
1000
Government Bonds
300
Loans Outstanding
800 Саpital
200
Total
1200
Total
1200
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