Homework Help is Here – Start Your Trial Now!
Business
Economics
C. Suppose that Sats immediately spends all of his loan by writing a cheque to his psychologist, Freda Freud. She deposits it in her account, which happens to also be at the Maple Leafs Bank. The bank is now (Click to select) v by $ d. Suppose, instead, that the bank makes a loan for the amount in your answer in part (a), which then clears against the Maple Leafs Bank. Show the resulting balance sheet in columns (2) in the table above. e. The Bank now has excess reserves of $ Suppose that there are a total of 9 other banks in the economy and that the balance sheet for the whole banking system is presented in the table below. Assume that each of the other banks also has a target reserve ratio of 10%. (1 all) $. Assets (1 all) Liabilities/ Equity $9,000,000 Reserves $1,200,000 $ Demand deposits Shareholders’ equity 5,000,000 Loans 6,800,000 Securities 2,500, 000 Fixed assets 3,500,000 Total $14,000,000 Total $14,000,000 In the table above, show the balance sheet of this banking system when it is fully loaned up. Use columns (1 all). 1. The increase in the money supply as a result of all the banks becoming fully loaned up is $ . Returning to the original balance sheet. What would be the consequence of the economy's central bank imposing a 20% required eserve ratio on all banks? and $ worth of loans would have to be called in. The Banking system would be (Click to select) ♥ by $

C. Suppose that Sats immediately spends all of his loan by writing a cheque to his psychologist, Freda Freud. She deposits it in her account, which happens to also be at the Maple Leafs Bank. The bank is now (Click to select) v by $ d. Suppose, instead, that the bank makes a loan for the amount in your answer in part (a), which then clears against the Maple Leafs Bank. Show the resulting balance sheet in columns (2) in the table above. e. The Bank now has excess reserves of $ Suppose that there are a total of 9 other banks in the economy and that the balance sheet for the whole banking system is presented in the table below. Assume that each of the other banks also has a target reserve ratio of 10%. (1 all) $. Assets (1 all) Liabilities/ Equity $9,000,000 Reserves $1,200,000 $ Demand deposits Shareholders’ equity 5,000,000 Loans 6,800,000 Securities 2,500, 000 Fixed assets 3,500,000 Total $14,000,000 Total $14,000,000 In the table above, show the balance sheet of this banking system when it is fully loaned up. Use columns (1 all). 1. The increase in the money supply as a result of all the banks becoming fully loaned up is $ . Returning to the original balance sheet. What would be the consequence of the economy's central bank imposing a 20% required eserve ratio on all banks? and $ worth of loans would have to be called in. The Banking system would be (Click to select) ♥ by $

ECON MICRO
ECON MICRO
5th Edition
ISBN:9781337000536
Author:William A. McEachern
Publisher:William A. McEachern
Chapter13: Capital, Interest, Entrepreneurship, And Corporate Finance
Section: Chapter Questions
Problem 4.8P
See similar textbooks
icon
Related questions
Question
100%
The table below is the current balance sheet for the Maple Leafs Bank. Answer the following questions assuming that the bank's target reserve ratio is 10%. Assets (1) (2) Liabilities / Equity (1) (2) $120, еее $4 Demand deposits $ $900,000 Reserves Loans 680,000 Shareholders' equity 500,000 Securities 250,000 Fixed assets 350, 000 $1,400, өеө Total $1,400,000 Total a. This bank is (Click to select) v by $ b. Suppose that a loan, in the amount of the excess reserves found in part (a), is made to Sats Mundin. Show the resulting balance sheet in columns (1) in the table above. C. Suppose that Sats immediately spends all of his loan by writing a cheque to his psychologist, Freda Freud. She deposits it in her account, which happens to also be at the Maple Leafs Bank. The bank is now (Click to select) v by $ d. Suppose, instead, that the bank makes a loan for the amount in your answer in part (a), which then clears against the Maple Leafs Bank. Show the resulting balance sheet in columns (2) in the table above. e. The Bank now has excess reserves of $ Suppose that there are a total of 9 other banks in the economy and that the balance sheet for the whole banking system is presented in the table below. Assume that each of the other banks also has a target reserve ratio of 10%. (1 all) Liabilities / Equity (1 all) Assets < Prev 36 of 40 Next > arch
Transcribed Image Text:The table below is the current balance sheet for the Maple Leafs Bank. Answer the following questions assuming that the bank's target reserve ratio is 10%. Assets (1) (2) Liabilities / Equity (1) (2) $120, еее $4 Demand deposits $ $900,000 Reserves Loans 680,000 Shareholders' equity 500,000 Securities 250,000 Fixed assets 350, 000 $1,400, өеө Total $1,400,000 Total a. This bank is (Click to select) v by $ b. Suppose that a loan, in the amount of the excess reserves found in part (a), is made to Sats Mundin. Show the resulting balance sheet in columns (1) in the table above. C. Suppose that Sats immediately spends all of his loan by writing a cheque to his psychologist, Freda Freud. She deposits it in her account, which happens to also be at the Maple Leafs Bank. The bank is now (Click to select) v by $ d. Suppose, instead, that the bank makes a loan for the amount in your answer in part (a), which then clears against the Maple Leafs Bank. Show the resulting balance sheet in columns (2) in the table above. e. The Bank now has excess reserves of $ Suppose that there are a total of 9 other banks in the economy and that the balance sheet for the whole banking system is presented in the table below. Assume that each of the other banks also has a target reserve ratio of 10%. (1 all) Liabilities / Equity (1 all) Assets < Prev 36 of 40 Next > arch
C. Suppose that Sats immediately spends all of his loan by writing a cheque to his psychologist, Freda Freud. She deposits it in her account, which happens to also be at the Maple Leafs Bank. The bank is now (Click to select) v by $ d. Suppose, instead, that the bank makes a loan for the amount in your answer in part (a), which then clears against the Maple Leafs Bank. Show the resulting balance sheet in columns (2) in the table above. e. The Bank now has excess reserves of $ Suppose that there are a total of 9 other banks in the economy and that the balance sheet for the whole banking system is presented in the table below. Assume that each of the other banks also has a target reserve ratio of 10%. (1 all) Liabilities / Equity (1 all) Assets $1,200,000$ Demand deposits $9,000,000 $. Reserves Shareholders' equity 5,000,000 Loans 6,800,000 Securities 2,500,000 Fixed assets 3,500,000 $14,000,000 Total Total $14,000,000 f. In the table above, show the balance sheet of this banking system when it is fully loaned up. Use columns (1 all). g. The increase in the money supply as a result of all the banks becoming fully loaned up is $ h. Returning to the original balance sheet. What would be the consequence of the economy's central bank imposing a 20% required reserve ratio on all banks? and $ worth of loans would have to be called in. The Banking system would be (Click to select) v by $
Transcribed Image Text:C. Suppose that Sats immediately spends all of his loan by writing a cheque to his psychologist, Freda Freud. She deposits it in her account, which happens to also be at the Maple Leafs Bank. The bank is now (Click to select) v by $ d. Suppose, instead, that the bank makes a loan for the amount in your answer in part (a), which then clears against the Maple Leafs Bank. Show the resulting balance sheet in columns (2) in the table above. e. The Bank now has excess reserves of $ Suppose that there are a total of 9 other banks in the economy and that the balance sheet for the whole banking system is presented in the table below. Assume that each of the other banks also has a target reserve ratio of 10%. (1 all) Liabilities / Equity (1 all) Assets $1,200,000$ Demand deposits $9,000,000 $. Reserves Shareholders' equity 5,000,000 Loans 6,800,000 Securities 2,500,000 Fixed assets 3,500,000 $14,000,000 Total Total $14,000,000 f. In the table above, show the balance sheet of this banking system when it is fully loaned up. Use columns (1 all). g. The increase in the money supply as a result of all the banks becoming fully loaned up is $ h. Returning to the original balance sheet. What would be the consequence of the economy's central bank imposing a 20% required reserve ratio on all banks? and $ worth of loans would have to be called in. The Banking system would be (Click to select) v by $
Expert Solution
steps

Step by step

Solved in 2 steps with 2 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Banking
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ECON MICRO
ECON MICRO
Economics
ISBN:
9781337000536
Author:
William A. McEachern
Publisher:
Cengage Learning
Principles of Economics 2e
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Economics Today and Tomorrow, Student Edition
Economics Today and Tomorrow, Student Edition
Economics
ISBN:
9780078747663
Author:
McGraw-Hill
Publisher:
Glencoe/McGraw-Hill School Pub Co
Economics:
Economics:
Economics
ISBN:
9781285859460
Author:
BOYES, William
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS