Consider the balance sheet for the Wahoo Bank as presented here. Use a required reserve ratio of 10% and assume that the bank keeps no excess reserves. Wahoo Bank Balance Sheet

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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Consider the balance sheet for the Wahoo Bank as presented here. Use a
required reserve ratio of 10% and assume that the bank keeps no excess
reserves.
Wahoo Bank Balance Sheet
Assets
Liabilities and net worth
Government
securities
Required reserves
Excess reserves
$1,600
$400
$0
$3,000
Liabilities:
Checking deposits
$4,000
Net worth
$1,000
Loans
Total assests
$5000
What will change on the balance sheet if Alexa deposits $200 into her checking
account?
Click to view larger image, e
Required reserves will nciatc by $200.
Outstanding liabilities decrease by $200.
Required reserves decrease by $200.
Outstanding liabilities increase by $200.
Transcribed Image Text:Consider the balance sheet for the Wahoo Bank as presented here. Use a required reserve ratio of 10% and assume that the bank keeps no excess reserves. Wahoo Bank Balance Sheet Assets Liabilities and net worth Government securities Required reserves Excess reserves $1,600 $400 $0 $3,000 Liabilities: Checking deposits $4,000 Net worth $1,000 Loans Total assests $5000 What will change on the balance sheet if Alexa deposits $200 into her checking account? Click to view larger image, e Required reserves will nciatc by $200. Outstanding liabilities decrease by $200. Required reserves decrease by $200. Outstanding liabilities increase by $200.
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