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Complete the following table to reflect any changes in Southeast Mutual Bank's T-account (before the bank makes any new loans). Assets (Dollars) 1,500,000 Complete the following table to show the effect of a new deposit on excess and required reserves Hint: If the change is negative, be sure to enter the value as negative number. Amount Deposited Change in Excess Reserves Change in Required Reserves (Dollars) (Dollars) Liabilities Southeast Mutual Bank Walls Fergo Bank PJMorton Bank $300,000 $1,200,000 Increase in Deposits Increase in Required Reserves (Dollars) (Dollars) $1,500,000 $3,600,000 Now, suppose Southeast Mutual Bank loans out all of its new excess reserves to Megan, who immediately uses the funds to write a check to Larry. Larry deposits the funds immediately into his checking account at Walls Fergo Bank. Then Walls Fergo Bank lends out all of its new excess reserves to Alex, who writes a check to Susan, who deposits the money into her account at PJMorton Bank. PJMorton lends out all of its new excess reserves to Becky in turn. uired reserve ratio is 20%. Fill in the following table to show the effect of this ongoing chain of events at each bank. Enter each answer to the nearest dollar. Increase in Loans (Dollars) Assume this process continues, with each successive loan deposited into a checking account and no banks keeping any excess reserves. Under these assumptions, the $1,500,000 injection into the money supply results in an overall increase of in demand deposits.

Complete the following table to reflect any changes in Southeast Mutual Bank's T-account (before the bank makes any new loans). Assets (Dollars) 1,500,000 Complete the following table to show the effect of a new deposit on excess and required reserves Hint: If the change is negative, be sure to enter the value as negative number. Amount Deposited Change in Excess Reserves Change in Required Reserves (Dollars) (Dollars) Liabilities Southeast Mutual Bank Walls Fergo Bank PJMorton Bank $300,000 $1,200,000 Increase in Deposits Increase in Required Reserves (Dollars) (Dollars) $1,500,000 $3,600,000 Now, suppose Southeast Mutual Bank loans out all of its new excess reserves to Megan, who immediately uses the funds to write a check to Larry. Larry deposits the funds immediately into his checking account at Walls Fergo Bank. Then Walls Fergo Bank lends out all of its new excess reserves to Alex, who writes a check to Susan, who deposits the money into her account at PJMorton Bank. PJMorton lends out all of its new excess reserves to Becky in turn. uired reserve ratio is 20%. Fill in the following table to show the effect of this ongoing chain of events at each bank. Enter each answer to the nearest dollar. Increase in Loans (Dollars) Assume this process continues, with each successive loan deposited into a checking account and no banks keeping any excess reserves. Under these assumptions, the $1,500,000 injection into the money supply results in an overall increase of in demand deposits.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Please answer everything in the photos. Bottom question is asking which option below is the overall increase. $750,000 $6,000,000 or $7,500,000.
Suppose Southeast Mutual Bank, Walls Fergo Bank, and PJMorton Bank all have zero excess reserves. The required reserve ratio is presently set at 20%. Raphael, a Southeast Mutual Bank customer, deposits $1,500,000 into his checking account at the local branch. Complete the following table to reflect any changes in Southeast Mutual Bank's T-account (before the bank makes any new loans). Assets Liabilities Complete the following table to show the effect of a new deposit on excess and required reserves Hint: If the change is negative, be sure to enter the value as negative number. Amount Deposited Change in Excess Reserves (Dollars) (Dollars) 1,500,000 Change in Required Reserves (Dollars) Southeast Mutual Bank Walls Fergo Bank PJMorton Bank $300,000 $1,200,000 Increase in Deposits Increase in Required Reserves (Dollars) (Dollars) $1,500,000 $3,600,000 Now, suppose Southeast Mutual Bank loans out all of its new excess reserves to Megan, who immediately uses the funds to write a check to Larry. Larry deposits the funds immediately into his checking account at Walls Fergo Bank. Then Walls Fergo Bank lends out all of its new excess reserves to Alex, who writes a check to Susan, who deposits the money into her account at PJMorton Bank. PJMorton lends out all of its new excess reserves to Becky in turn. uired reserve ratio is 20%. Fill in the following table to show the effect of this ongoing chain of events at each bank. Enter each answer to the nearest dollar. Increase in Loans (Dollars) Assume this process continues, with each successive loan deposited into a checking account and no banks keeping any excess reserves. Under these assumptions, the $1,500,000 injection into the money supply results in an overall increase of in demand deposits. +
Transcribed Image Text:Suppose Southeast Mutual Bank, Walls Fergo Bank, and PJMorton Bank all have zero excess reserves. The required reserve ratio is presently set at 20%. Raphael, a Southeast Mutual Bank customer, deposits $1,500,000 into his checking account at the local branch. Complete the following table to reflect any changes in Southeast Mutual Bank's T-account (before the bank makes any new loans). Assets Liabilities Complete the following table to show the effect of a new deposit on excess and required reserves Hint: If the change is negative, be sure to enter the value as negative number. Amount Deposited Change in Excess Reserves (Dollars) (Dollars) 1,500,000 Change in Required Reserves (Dollars) Southeast Mutual Bank Walls Fergo Bank PJMorton Bank $300,000 $1,200,000 Increase in Deposits Increase in Required Reserves (Dollars) (Dollars) $1,500,000 $3,600,000 Now, suppose Southeast Mutual Bank loans out all of its new excess reserves to Megan, who immediately uses the funds to write a check to Larry. Larry deposits the funds immediately into his checking account at Walls Fergo Bank. Then Walls Fergo Bank lends out all of its new excess reserves to Alex, who writes a check to Susan, who deposits the money into her account at PJMorton Bank. PJMorton lends out all of its new excess reserves to Becky in turn. uired reserve ratio is 20%. Fill in the following table to show the effect of this ongoing chain of events at each bank. Enter each answer to the nearest dollar. Increase in Loans (Dollars) Assume this process continues, with each successive loan deposited into a checking account and no banks keeping any excess reserves. Under these assumptions, the $1,500,000 injection into the money supply results in an overall increase of in demand deposits. +
Suppose Southeast Mutual Bank, Walls Fergo Bank, and PJMorton Bank all have zero excess reserves. The required reserve ratio is presently set at 20%. Raphael, a Southeast Mutual Bank customer, deposits $1,500,000 into his checking account at the local branch. Complete the following table to reflect any changes in Southeast Mutual Bank's T-account (before the bank makes any new loans). Co Hi Building and furniture Deposits Loans Net worth Reserves (Dollars) 1,500,000 Assets Liabilities + le to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 20%. tive, be sure to enter the value as negative number. hange in Excess Reserves (Dollars) Change in Required Reserves (Dollars) Now, suppose Southeast Mutual Bank loans out all of its new excess reserves to Megan, who immediately uses the funds to write a check to Larry. Walls Fergo Bank. Then Walls Fergo Bank lends out all of its new excess reserves to Larry deposits the funds immediately into his checking account Alex, who writes a check to Susan, who deposits the money into her account at PJMorton Bank. PJMorton lends out all of its new excess reserves to Becky in turn. Southeast Mutual Bank Walls Fergo Bank PJMorton Bank Fill in the following table to show the effect of this ongoing chain of events at each bank. Enter each answer to the nearest dollar. Increase in Deposits Increase in Required Reserves (Dollars) (Dollars) Increase in Loans (Dollars) Assume this process continues, with each successive loan deposited into a checking account and no banks keeping any excess reserves. Under these assumptions, the $1,500,000 injection into the money supply results in an overall increase of in demand deposits.
Transcribed Image Text:Suppose Southeast Mutual Bank, Walls Fergo Bank, and PJMorton Bank all have zero excess reserves. The required reserve ratio is presently set at 20%. Raphael, a Southeast Mutual Bank customer, deposits $1,500,000 into his checking account at the local branch. Complete the following table to reflect any changes in Southeast Mutual Bank's T-account (before the bank makes any new loans). Co Hi Building and furniture Deposits Loans Net worth Reserves (Dollars) 1,500,000 Assets Liabilities + le to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 20%. tive, be sure to enter the value as negative number. hange in Excess Reserves (Dollars) Change in Required Reserves (Dollars) Now, suppose Southeast Mutual Bank loans out all of its new excess reserves to Megan, who immediately uses the funds to write a check to Larry. Walls Fergo Bank. Then Walls Fergo Bank lends out all of its new excess reserves to Larry deposits the funds immediately into his checking account Alex, who writes a check to Susan, who deposits the money into her account at PJMorton Bank. PJMorton lends out all of its new excess reserves to Becky in turn. Southeast Mutual Bank Walls Fergo Bank PJMorton Bank Fill in the following table to show the effect of this ongoing chain of events at each bank. Enter each answer to the nearest dollar. Increase in Deposits Increase in Required Reserves (Dollars) (Dollars) Increase in Loans (Dollars) Assume this process continues, with each successive loan deposited into a checking account and no banks keeping any excess reserves. Under these assumptions, the $1,500,000 injection into the money supply results in an overall increase of in demand deposits.
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