Balance sheet of the Summer bankAssetsLiabilities Cash $ 8,000Deposited with the Fed $ 6,000 Loans $ 116,000 Deposits $ 80,000 Capital $ 50,000Total $ 130,000Total $ 130,000 The required reserve ratio (RRR) on all deposits is 8%How much new amount of loan the entire banking system be able to create because of the excess reserves?

Deposits = 80,000 Required reserve ratio: It is the percentage that commercial banks are required to…

Answered: Balance sheet of the Summer bank…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Balance sheet of the Summer bank

Assets

Liabilities

Cash $ 8,000

Deposited with the Fed $ 6,000

Loans $ 116,000

Deposits $ 80,000

Capital $ 50,000

Total $ 130,000

The required reserve ratio (RRR) on all deposits is 8%

How much new amount of loan the entire banking system be able to create because of the excess reserves?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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