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 70 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 70 percent rather than 75 percent, what would the system's lending capacity be? $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The balance sheet of Nationa Bank is shown below (assume a legal reserve ratio of 10%): Assets Liabilities & Net Worth Reserves 90,000 Checkable Deposits 500,000 Cash 20,000 Stock Shares 270,000 Loans 125,000 Securities 235,000 Property 300,000 1. Based on the balance sheet above, how much money can the bank create? 2. If the bank creates the full amount possible, how much money can the banking system create as a result? 3. If the Federal Reserve raises the reserve ratio to 20%, how much will the bank and banking system be able to create based on the new reserve ratio?
Total reserves $55 billion Transactions deposits: $600 billion Cash held by public: $400 billion Bonds held by public: $400 billion Stocks held by public: $140 billion Gross domestic product: $8 trillion Interest rate: 6 percent Required reserve ratio: 0.10 How large is the money supply (M1)? How much excess reserves are there? What is the money multiplier? What is the available lending capacity?
3-4 please
Part 8 says reserves: number Part 9 says loans: number
No written by hand solution
Assuming that the reserve ratio is 10%, what amount of excess reserves are held by with the bank balance sheet listed below? Assets Liabilities & Net Worth Reserves $280,000 Checking deposits $2,800,000 Loans Outstanding $2,920,000 Total $3,200,000 Net Worth Stockholders' Equity $400,000 Total $3,200,000 a. $240,000 b. zero c. $320,000 d. $280,000
Ee 497.
Question 5 Homework ⚫ Answered ⚫ Due Jul 24th, 11:50 PM MONEY IN THE ECONOMY ($billions) Currency held by the public = $1,000 Demand Deposits = $3,000 Other Liquid Deposits = $12,000 Small Denomination Time Deposits = $500 Retail Money Market Funds = $1,500 Use the information above to answer this item. If depositors move $100 billion from demand deposits to small denomination time deposits, then: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a b C the value of M1 stays the same, the value of M2 increases by $100 billion, and the system becomes less liquid. the value of M1 decreases by $100 billion, the value of M2 stays the same, and the system becomes less liquid. the value of M1 decreases by $100 billion, the value of M2 increases by $100 billion, and the system becomes less liquid. × Your answer d the value of M1 stays the same, the value of M2 stays the same, and the liquidity of the system does not change.
11. The monies that are very liquid such as cash, checkable (demand) deposits, and traveler's checks are considered to be
10 Raquel goes down to Goldenrod Bank and deposits $2350 into their checking account. What has happened to Goldenrod Bank’s balance sheet? Mortgages have increased by $2350 The money multiplier has increased Goldenrod Bank's reserve ratio has increased Goldenrod Bank's liabilities have increased by $2350
© Macmillan Learning What is the bank's net worth? Assume that the T-chart shows the financial position of a small local bank. Assets Loans: $27.00 Bonds: $13.00 Reserves: $43.00 Liabilities Deposits: $30.00
If the banking system has 5 million excess reserves and the required reserve ratio is 25% what is the maximum amount by wisdom money supply can be increased