Loans $8,000 Debt $800 Short-term securities $800 Capital (owners' equity) $200 Refer to Table 2. The required reserve ratio is 6 percent and First Nationa to the Federal Reserve. This action will increase First National's reserves by $150. Its excess reserves are $24 decrease First National's reserves by S150. Its excess reserves are $0. increase First National's reserves by $150. Its excess reserves increases increase First National's reserves by S150. Its total reserves increase b: both c and d above

Loans $8,000 Debt $800 Short-term securities $800 Capital (owners' equity) $200 Refer to Table 2. The required reserve ratio is 6 percent and First Nationa to the Federal Reserve. This action will increase First National's reserves by $150. Its excess reserves are $24 decrease First National's reserves by S150. Its excess reserves are $0. increase First National's reserves by $150. Its excess reserves increases increase First National's reserves by S150. Its total reserves increase b: both c and d above

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Big bucks bank Assets Liabilities Total reserves $30mm demand deposits $190mm Loans $100mm Bonds $100mm Stockholder equity $40 mm Suppose the required reserve ratio is 10%. What is the maximum amount of money Big buck bank can create? If the reserve ratio is increased to 14%, what is the maximum amount of money BBB can create? 3 If the reserve ratio is still at 10% and BBB chose to buy bonds instead of making loans with its excess reserves, what is the maximum amount of money BBB can create? a) From question #1 & #3, if the prospective Loans and Bonds both paid interest of 6.8%, which strategy would be more profitable for BBB? b) If BBB decided to pursue #1 as a strategy, what is the maximum money making potential of the banking…
Part d
"If the required reserve ratio is 20% and the current deposit is $50,000. Calculate the amount of new money created." O"$200,000" O "$250,000" O"$10,000" "$40,000"
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24. Assuming the required reserve ratio is 10%, how much can this bank lend? a) $200,000 b) $300,000 c) $400,000 d) $550,000 e) $3,000,000
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1. If the reserve ratio is 10%, a bank with $1,000 in deposits has required reserves of $ Type your answer here 2. If a bank is holding required reserves of $100 to support $500 in deposits, the reserve ratio is Type your answer here 3. If a bank with $500 in deposits is holding reserves of $50 when the reserve ratio is 10%, the bank has excess reserves of $ %. Type your answer here
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