answer questions a and b. a. Fill in the blanks in the balance sheet below for the Last National Bank. Balance Sheet for Last National Bank Assets Liabilitics Legal Reserves 7.S | Demand Deposits 8.S Vault cash 9. S | Judy 10. S Deposits at Fed 11.S
answer questions a and b. a. Fill in the blanks in the balance sheet below for the Last National Bank. Balance Sheet for Last National Bank Assets Liabilitics Legal Reserves 7.S | Demand Deposits 8.S Vault cash 9. S | Judy 10. S Deposits at Fed 11.S
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Assume that the Fed buys a $3,000 government security from Judy, who deposits the $3,000 in her checking account at the Last
National Bank. (Assume that Last National's T-account balances start at zero before the deposit.) The Last National Bank puts $400
of this money in vault cash, and the remainder is deposited at the Fed. Assuming a required reserve ratio of 20% for all banks
answer questions a and b.
a.
Fill in the blanks in the balance sheet below for the Last National Bank.
Balance Sheet for Last National Bank
Assets
Liabilities
Legal Reserves
7.S
| Demand Deposits 8.S.
Vault cash
9. S
| Judy 10. S
Deposits at Fed
11.S
Required Reserves
12. S
Excess Reserves
13. S
Loans
b. Assume that Rudy goes to the Last National Bank and gets a loan of $2400 in the form of a new checking account (demand
deposit). What would this do to the values of the bank's assets and liabilities? Fill in the blanks below with your answers.
Balance Sheet for Last National Bank
Assets
Liabilities
Legal Reserves
14. S
| Demand Deposits 15. S
Vault cash
16. S
Judy
17.S
Deposits at Fed
18. S
| Rudy 19.S
Required Reserves 20. S
Excess Reserves
21.S
Loans
22. S](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F425c5d35-25cc-42b5-9ce2-a349227938c4%2Feded700e-60c3-4e82-81b2-dc1efbb5b1c0%2Fbadv53_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Assume that the Fed buys a $3,000 government security from Judy, who deposits the $3,000 in her checking account at the Last
National Bank. (Assume that Last National's T-account balances start at zero before the deposit.) The Last National Bank puts $400
of this money in vault cash, and the remainder is deposited at the Fed. Assuming a required reserve ratio of 20% for all banks
answer questions a and b.
a.
Fill in the blanks in the balance sheet below for the Last National Bank.
Balance Sheet for Last National Bank
Assets
Liabilities
Legal Reserves
7.S
| Demand Deposits 8.S.
Vault cash
9. S
| Judy 10. S
Deposits at Fed
11.S
Required Reserves
12. S
Excess Reserves
13. S
Loans
b. Assume that Rudy goes to the Last National Bank and gets a loan of $2400 in the form of a new checking account (demand
deposit). What would this do to the values of the bank's assets and liabilities? Fill in the blanks below with your answers.
Balance Sheet for Last National Bank
Assets
Liabilities
Legal Reserves
14. S
| Demand Deposits 15. S
Vault cash
16. S
Judy
17.S
Deposits at Fed
18. S
| Rudy 19.S
Required Reserves 20. S
Excess Reserves
21.S
Loans
22. S
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