please answer in text form and in proper format answer with must explanation , calculation for each part and steps clearly Assume the following data describe the condition of the banking system. What would the following values be immediately after achange in the required reserve ratio from 0.20 to 0.27?Instructions: Round your responses to one decimal place..tsRequired Reserve RatiokippedIf 20 percentIf 27 percenta. Total deposits$100 billionbillionBookb. Total reserves30 billionbillionrencesc. Required reserves20 billionbilliond. Excess reserves10 billionbillione. Money multiplier5f. Unused lending capacity$50 billionbillion

Detailed Explanation: (a) Total deposits would remain unchanged. Total deposits = $100 billion (b)…

Answered: Assume the following data describe the…

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

See similar textbooks

Similar questions

Explain what would happen if banks were notified they had to increase their required reserves by one percentage point from, say, 9 to 10 of deposits. What would their options be to come up with the cash?
Humongous Bank is the only bank in the economy. The people in this economy have 20 million in money, and they deposit all their money in Humongous Bank. Humongous Bank decides on a policy of holding 100 reserves. Draw a T-account for the bank. Humongous Bank is required to hold 5 of its existing 20 million as reserves, and to loan out the rest. Draw a T-account for the bank after it has made its first round of loans. Assume that Humongous bank is part of a multibank system. How much will money supply increase with that original 19 million loan?
Can you name some item that is a store of value, but does not serve the other functions of money?
You take $100 you had kept under your mattressand deposit it in your bank account. If this $100stays in the banking system as reserves and if bankshold reserves equal to 10 percent of deposits, byhow much does the total amount of deposits in thebanking system increase? By how much does themoney supply increase?
ou just deposited $4,000 in cash into a checking account at the local bank. Assume that banks lend out all excess reserves and there are no leaks in the banking system. That is, all money lent by banks gets deposited in the banking system. Round your answers to the nearest dollar. If the reserve requirement is 1212%, how much will your deposit increase the total value of checkable bank deposits? $ If the reserve requirement is 44%, how much will your deposit increase the total value of checkable deposits? $ Increasing the reserve requirement the money supply.
Suppose the total reserves held by banks amount to R13.09 million. Banks hold R1 in excessreserves for every R10 of required reserves held and the required reserve ratio (r) is 8.5%. Thetotal amount of currency = R60 million. Calculate the amount of required reserves, and totalamount of deposits held by banks, and the total amount of money supply in the system.
Assume that a bank has on its asset side reserves of 1000 and loans of 6000 and on itsliability side deposits of 7000. Assume that the required reserve ratio is 10 percent.a. How much is the bank required to hold as reserves given its deposits of 7000?
Assume that a bank has on its asset side reserves of 1000 and loans of 6000 and on itsliability side deposits of 7000. Assume that the required reserve ratio is 10 percent.a. Calculate the excess reserve ?
10
The bank you own has the following balance sheet Assets OA. You can go to the discount window. OB. You can call in or sell off loans. OC. You can borrow reserves in the federal funds market OD. Any of the above are appropriate actions to take Liabilities $75 million Reserves Loans Deposits Bank capital $525 million If the bank suffers a deposit outflow of $50 million with a required reserve ratio on deposits of 10%, what actions can you take to keep your bank from failing? $500 million $100 million
There is a reserve requirement of 25 percent in the United States. If the Federal Reserve makes an open market sale of $27 million, the money supply will Multiple Choice О increase by $675 million. о decrease by $108 million. C 1 ! increase by $108 million. decrease by $675 million. @ 62 Q 54 #3 Q W E A N S X D % 5 8 * 00 27 & R T Y U כ + - ) 9 0 0 P LL F G H J K L C V B N M
Assume we have a simplified banking system inbalance-sheet equilibrium. Also assume that allbanks are subject to a uniform 10 percent reserverequirement and demand deposits are the onlyform of money. A commercial bank receiving anew demand deposit of $100 would be able toextend new loans in the amount ofa. $10.b. $90.c. $100.d. $1,000.

SEE MORE QUESTIONS

Recommended textbooks for you

ECON MACRO

Economics

ISBN:

9781337000529

Author:

William A. McEachern

Publisher:

Cengage Learning

Economics (MindTap Course List)

Economics

ISBN:

9781337617383

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Macroeconomics

Economics

ISBN:

9781337617390

Author:

Roger A. Arnold

Publisher:

Cengage Learning

ECON MACRO

Economics

ISBN:

9781337000529

Author:

William A. McEachern

Publisher:

Cengage Learning

Economics (MindTap Course List)

Economics

ISBN:

9781337617383

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Macroeconomics

Economics

ISBN:

9781337617390

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Essentials of Economics (MindTap Course List)

Economics

ISBN:

9781337091992

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Brief Principles of Macroeconomics (MindTap Cours…

Economics

ISBN:

9781337091985

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Exploring Economics

Economics

ISBN:

9781544336329

Author:

Robert L. Sexton

Publisher:

SAGE Publications, Inc

SEE MORE TEXTBOOKS