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he table below is the balance sheet for all banks combined in the banking system. All banks have a targe- Assets Liabilities/Equity Reserves $45,000 $ Demand Deposits $1,012,500 Loans 852,750 Shareholders' equity 112,500 Securities 112,500 Fixed assets. 114,750 Total 1,125,000 Total 1,125,000 %24

he table below is the balance sheet for all banks combined in the banking system. All banks have a targe- Assets Liabilities/Equity Reserves $45,000 $ Demand Deposits $1,012,500 Loans 852,750 Shareholders' equity 112,500 Securities 112,500 Fixed assets. 114,750 Total 1,125,000 Total 1,125,000 %24

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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The table below is the balance sheet for all banks combined in the banking system. All banks have a target reserve ratio of 4%. Assets Liabilities/Equity Reserves $45,000 $ Demand Deposits $1,012,500 Loans 852,750 Shareholders' equity 112,500 Securities 112,500 Fixed assets. 114,750 Total 1,125,000 Total 1,125,000 a. The amount of excess reserves is $ b. The maximum amount that loans and deposits could be increased by is $ C. Assume that the system becomes fully loaned up. Show the new balance sheet in the table above. d. Now that the system is fully loaned up, the money supply will have increased by $ 5 of 7 Next > < Prev W 立
Transcribed Image Text:The table below is the balance sheet for all banks combined in the banking system. All banks have a target reserve ratio of 4%. Assets Liabilities/Equity Reserves $45,000 $ Demand Deposits $1,012,500 Loans 852,750 Shareholders' equity 112,500 Securities 112,500 Fixed assets. 114,750 Total 1,125,000 Total 1,125,000 a. The amount of excess reserves is $ b. The maximum amount that loans and deposits could be increased by is $ C. Assume that the system becomes fully loaned up. Show the new balance sheet in the table above. d. Now that the system is fully loaned up, the money supply will have increased by $ 5 of 7 Next > < Prev W 立
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