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Empathy State Bank Assets Vault Cash Deposits at the Federal Reserve Loans Reference: Ref 12-1 This bank's reserve ratio is: OA. 0.075. OB. 0.82. OC.0.10. OD.0.18. Liabilities $11,000 Deposits $110,000 9,000 90,000

Empathy State Bank Assets Vault Cash Deposits at the Federal Reserve Loans Reference: Ref 12-1 This bank's reserve ratio is: OA. 0.075. OB. 0.82. OC.0.10. OD.0.18. Liabilities $11,000 Deposits $110,000 9,000 90,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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SCENARIO: Assume that the Empathy State Bank begins with the balance sheet below and is fully loaned up. Empathy State Bank Assets Vault Cash Deposits at the Federal Reserve Loans Reference: Ref 12-1 This bank's reserve ratio is: OA. 0.075. OB. 0.82. OC. 0.10. OD.0.18. QUESTIVIN 4 Suppose that initially a bank has excess reserves of $800 and the reserve ratio is 20%. Then Andy deposits $1,000 of cash into his checking account and the bank lends $500 to Molly. That bank can lend an additional OA. $800. OB. $2,400. OC. $200. OD. $1200 OE. $1,100.. QUESTION 6 Liabilities $11,000 Deposits $110,000 9,000 90,000 SCENARIO: Assume that the Empathy State Bank begins with the balance sheet below and is fully joaned up. Empathy State Bank Assets Vault Cash Deposits at the Federal Reserve Loans Reference: Ref 12-1 OB. $45,000 OC. $10,000 OD. $14,500 Liabilities $11,000 Deposits $110,000 9,000 90,000 If this bank is subject to a reserve requirement of 5%, what is the amount of its excess reserves? OA. $35,500
Transcribed Image Text:SCENARIO: Assume that the Empathy State Bank begins with the balance sheet below and is fully loaned up. Empathy State Bank Assets Vault Cash Deposits at the Federal Reserve Loans Reference: Ref 12-1 This bank's reserve ratio is: OA. 0.075. OB. 0.82. OC. 0.10. OD.0.18. QUESTIVIN 4 Suppose that initially a bank has excess reserves of $800 and the reserve ratio is 20%. Then Andy deposits $1,000 of cash into his checking account and the bank lends $500 to Molly. That bank can lend an additional OA. $800. OB. $2,400. OC. $200. OD. $1200 OE. $1,100.. QUESTION 6 Liabilities $11,000 Deposits $110,000 9,000 90,000 SCENARIO: Assume that the Empathy State Bank begins with the balance sheet below and is fully joaned up. Empathy State Bank Assets Vault Cash Deposits at the Federal Reserve Loans Reference: Ref 12-1 OB. $45,000 OC. $10,000 OD. $14,500 Liabilities $11,000 Deposits $110,000 9,000 90,000 If this bank is subject to a reserve requirement of 5%, what is the amount of its excess reserves? OA. $35,500
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