Consider a new deposit to the Canadian banking system of $2,500. Suppose that all commercial banks have a target reserve ratio (v) of 25 percent and there is no cash drain. a. The first round has been completed in the table below. Now, recalling that the new loans in the first round become the new deposits in the second round, complete the table. (Round your responses to the nearest dollar. If you have rounded a number and need to use it in another calculation, you should use this rounded value. For example, if the new loans in the second round are found to be $1,255.76 and rounded to $1,256, then if at some later point you need to use this value, you should use $1,256, not $1,255.76.) First Second Round Ain Deposits $2,500 AReserves $625 ALoans $1,875 Third Fourth

Consider a new deposit to the Canadian banking system of $2,500. Suppose that all commercial banks have a target reserve ratio (v) of 25 percent and there is no cash drain. a. The first round has been completed in the table below. Now, recalling that the new loans in the first round become the new deposits in the second round, complete the table. (Round your responses to the nearest dollar. If you have rounded a number and need to use it in another calculation, you should use this rounded value. For example, if the new loans in the second round are found to be $1,255.76 and rounded to $1,256, then if at some later point you need to use this value, you should use $1,256, not $1,255.76.) First Second Round Ain Deposits $2,500 AReserves $625 ALoans $1,875 Third Fourth

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

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Suppose Southeast Mutual Bank, Walls Fergo Bank, and PJMorton Bank all have zero excess reserves. The required reserve ratio is presently set at 25%. Paolo, a Southeast Mutual Bank customer, deposits $1,800,000 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). Deposits Assets (Dollars) 1,800,000 $1,800,000 ▼ Reserves Liabilities Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 25%. 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) Southeast Mutual Bank Walls Fergo Bank PJMorton Bank $450,000 Now, suppose Southeast Mutual Bank loans out all of its new excess reserves to Lucia, who immediately uses the funds to write a check to Kenji. Kenji deposits the funds…
Consider a withdrawal from the Canadian banking system of $2,500. Suppose that all commercial banks have a target reserve ratio (v) of 10 percent and there is no cash drain. a. The first round has been completed in the table below. Recalling that the new loans in the first round become the new deposits in the second round. Using the same approach, complete the table. (Round your responses to the nearest dollar. If you have rounded a number and need to use it in another calculation, you should use this rounded value. For example, if the new loans in the second round are found to be -$1,255.76 and rounded to -$1,256, then if at some later point you need to use this value, you should use -$1,256, not-$1,255.76.) Round & in Deposits -$2,500 First Second Third Fourth AReserves $250 ALoans -$2,250
John deposits $1,800 into his checking account. If the reserve ratio is 10%, what are the required and excess reserves? Required reserves: $[ Excess reserve erves: $
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How would the bank enter the following into it's t-account? Dennis makes a $750 deposit at his local bank. The reserve ratio for his bank is 0.25. Click here for t- accounts. O 1) t-account a 2) t-account b 3) t-account c 4) t-account d Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
9. How would you incorporate security considerations/costs into the transactions demand model? What would this imply for the demand for currency in a relatively insecure urban environment (a) compared with a relatively safe one, (b) when owner-identiﬁed smart cards become available? Do these factors affect the demand for demand deposits? How would the proportion of currency to demand deposits be affected in these cases? 10. Can the transactions demand model be used to explain why ﬁnancial innovations in recent decades have reduced the transactions demand for M1? 11. Are transactions demand models useless, as Sprenkle (1969) argued? If they are, how would you explain the demand for M1 or just for demand deposits in the economy?
Assume the Required Reserve Ratio is 20% for all banks. If Rob, a Third National Bank customer, writes a check for $100,000 to Darrin, a First National Bank Customer, who deposits the check in full into his checking account, then what impact has the transaction had on the loan creating potential of the banking system (these three banks)?
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B3-4 ALL QUESTIONS GO WITH GRAPH 1. What would be the level of excess reserves if the required reserve ratio were 20%? a) There would be a shortfall in required reserves of $100,000 b) 0 c) $300,000 d) $900,000 e) $1,000,000 2. If the reserve required ratio is 10%, how much can this bank lend? a) $900,000 b) $1,000,000 c) $1,300,000 d) $500,000 e) $400,000 3. Assume: a required reserve ratio of 10%, this bank is the only one with excess reserves, banks do not wish to hold excess reserves and the public does not wish to increase its cash holdings. What is the maximum amount of new money the banking system can create? a) $900,000 b) $500,000 c) $400,000 d) $4,000,000 e) $5,000,000
Suppose Southeast Mutual Bank, Walls Fergo Bank, and PJMorton Bank all have zero excess reserves. The required reserve ratio is presently set at 5%. Raphael, a Southeast Mutual Bank customer, deposits $200,000 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 (Dollars) 200,000 Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 5%. Hint: If the change is negative, be sure to enter the value as negative number. Amount Deposited Change in Excess Reserves (Dollars) Liabilities 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. Larry deposits the funds immediately into his checking account at Walls Fergo Bank. Then Walls Fergo Bank lends out all of its…
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Suppose Southeast Mutual Bank, Walls Fergo Bank, and PJMorton Bank all have zero excess reserves. The required reserve ratio is presently set at 10%. Eric, a Southeast Mutual Bank customer, deposits $250,000 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 when the required reserve ratio is 10%. 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) (Dollars) 250,000 Now, suppose Southeast Mutual Bank loans out all of its new excess reserves to Cho, who immediately uses the funds to write a check to Bob. Bob deposits the funds immediately into his checking…