Initial deposit ($100) $ The Money Multiplier Process Loan Loan University Bank $ Excess reserves: $25 Required reserves: $75 Deposit Bank #2 Deposit Excess reserves: $6.25 Required reserves: $18.75 Instructions: Round your responses to two decimal places. a. What volume of loans can the banking system in the figure support? Bank #3 Loan Deposit Excess reserves: $1.56 Required reserves: $4.69 Bank #4 etc. Excess reserves: $0.39 Required reserves: $1.17 b. If the reserve requirement were 15 percent rather than 75 percent, what would the system's lending capacity be?

Initial deposit ($100) $ The Money Multiplier Process Loan Loan University Bank $ Excess reserves: $25 Required reserves: $75 Deposit Bank #2 Deposit Excess reserves: $6.25 Required reserves: $18.75 Instructions: Round your responses to two decimal places. a. What volume of loans can the banking system in the figure support? Bank #3 Loan Deposit Excess reserves: $1.56 Required reserves: $4.69 Bank #4 etc. Excess reserves: $0.39 Required reserves: $1.17 b. If the reserve requirement were 15 percent rather than 75 percent, what would the system's lending capacity be?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter25: Money, Banking, And The Federal Reserve System

Section: Chapter Questions

Problem 7P

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1. You deposit $100 of currency into your account. Explain what happens to reserves , checkabledeposits, and monetary base? 2. Explain what the shadow banking system is and how it works. 3. Your bank has the following balance sheet:Assets LiabilitiesReserves $70 million Checkable deposits $200 millionSecurities $50 millionLoans $130 million Bank capital $50 millionIf the required reserve ratio is 10%, what actions should the bank manager take if there is anunexpected deposit outflow of $50 million? Explain your answer. 4. Explain and demonstrate graphically that if the central bank pursues targeting a monetaryaggregate, it is likely to lose control over the interest rate. 5. In the market for reserves, the federal funds rate is equal to the interest rate paid on excessreserves. Explain and demonstrate graphically the effect of an open market sale on the federalfunds rate.
Initial deposit ($100) $ The Money Multiplier Process Loan Loan University Bank $ Excess reserves: $25 Required reserves: $75 Deposit Bank #2 Deposit Excess reserves: $6.25 Required reserves: $18.75 Instructions: Round your responses to two decimal places. a. What volume of loans can the banking system in the figure support? Bank #3 Loan Deposit Excess reserves: $1.56 Required reserves: $4.69 Bank #4 b. If the reserve requirement were 70 percent rather than 75 percent, what would the system's lending capacity be? etc. Excess reserves: $0.39 Required reserves: $1.17
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Please do my banking questions 2 from a, b, and c please. thank you so much.
Below is the balance sheet for a bank. Under "Other" it has listed "$X" just think of this as the dollar amount needed to make the balance sheet balance. It is not important what that value is for this question. AssetsLiabilitiesReserves 42Deposits 245Loans 160 Securities 48Other $X Using the balance sheet above, find the level of required reserves for this bank if the required reserve ratio = 8%(Give answers to 2 decimal places as needed)
The table gives information about items on a bank's balance sheet. Calculate the bank's deposits that are part of M1, deposits that are part of M2, and the bank's loans, securities, and Item reserves. (millions of dollars) Checkable deposits Savings deposits Small time deposits 400 The bank's deposits that are part of M1 equal $ million. 500 720 The bank's deposits that are part of M2 equal $ million. Loans to businesses 950 Government securities 600 Currency 30 Reserves at the Fed 40 Enter your answer in the edit fields and then click Check Answer. 2 parts remaining Clear All Check Answer MacBook Air DII DD 80 888 F10 F11 F12 esc F4 F5 F6 F7 F8 F9 F1 F2 F3 ! @ 23 $ % & 1 2 4 6 7 { Y U P Q W E tab S D F G H K А caps lock > + I/ * 00
When a person makes a deposit $700 to a BOA in St. Louis. Currently the required reserves rate is 8%. Then how much money can be created through the banking system? Write only the integer number without $ sign and commas. Answer $__________.00
Only typed answer and please don't use chatgpt Assume the commercial banking system has checkable deposits of $20 billion and excess reserves of $2 billion at a time when the reserve ratio is 25 percent. If the reserve ratio is lowered to 20 percent, we can conclude that the: Answers: bank now has excess reserves of $3.2 billion. bank now has neither an excess nor a deficiency of reserves. maximum money-creating potential of the banking system has been increased by $7 billion. Board of Governors has decided that the economy is experiencing a high rate of inflation.
Suppose a bank gets $500 million dollars in deposits. The bank can only make loans and keep reserves. The bank gives $300 million in loans. The associated new money creation will be worth $ ___ million 500 1250 750 350
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