Imagine that the banking system's balance sheet can be represented by the following t-account: Assets   LIABILITIES AND NET WORTH   RESERVES 200 DEPOSITS 2000 BONDS 800     LOANS 1000 NETWORTH 0 TOTAL 2000 TOTAL 2000 Assuming the bank is "loaned up" the required reserve ratio is ___________ (round to two decimal places) The money multiplier is ___________ Imagine that the central bank uses open market operations to buy $300 worth of bonds from the bank above. Fill in the following t-account assuming that the money multiplier has taken its full effect: ASSETS   LIABILITIES AND NET WORTH   RESERVES __?___ DEPOSITS ___?__ BONDS ____?___     LOANS ____?____ NET WORTH ___?___ TOTAL _____?______ TOTAL ___?___

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Imagine that the banking system's balance sheet can be represented by the following t-account:

Assets   LIABILITIES AND NET WORTH  
RESERVES 200 DEPOSITS 2000
BONDS 800    
LOANS 1000 NETWORTH 0
TOTAL 2000 TOTAL 2000

Assuming the bank is "loaned up" the required reserve ratio is ___________ (round to two decimal places)

The money multiplier is ___________

Imagine that the central bank uses open market operations to buy $300 worth of bonds from the bank above. Fill in the following t-account assuming that the money multiplier has taken its full effect:

ASSETS   LIABILITIES AND NET WORTH  
RESERVES __?___ DEPOSITS ___?__
BONDS ____?___    
LOANS ____?____ NET WORTH ___?___
TOTAL _____?______ TOTAL ___?___
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