mat Big Bucks Bank has the simplified balance sheet shown below. The reserve ratio is 20 percent. (1) Liabiles and net worth Checkable deposits $ 25,000 $100,000 38.000 37,000 Enter your answers as a whole number the maximum amount of new loans that Big Bucks Bank can make? = able above, show in columns 1 and T how the bank's balance sheet will appear after the bank has lent this inserting the new values into the gray shaded cells of the given table. much has the money supply changed? 1 the bank's balance sheet appear after checks drawn for the entire amount of the new loans have been cle Show the new balance sheet in columns 2 and 2 by inserting the new values into the gray shaded cells of original figures, revist questions ab and c based on the assumption that the reserve ratio is now 15 pers

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
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Chapter1: Making Economics Decisions
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Suppose that Big Bucks Bank has the simplified balance sheet shown below. The reserve ratio is 20 percent.
Assets
(1)
Liabilities and net worth
Checkable deposits
$ 100,000
Reserves
$ 25,000
Securites
38,000
Loans
37,000
Instructions: Enter your answers as a whole number
a. What is the maximum amount of new loans that Big Bucks Bank can make?
Using the table above, show in columns 1 and T how the bank's balance sheet will appear after the bank has lent this additional
amount by inserting the new values into the gray shaded cells of the given table.
b. By how much has the money supply changed?
c. How will the bank's balance sheet appear after checks drawn for the entire amount of the new loans have been cleared agains
the bank? Show the new balance sheet in columns 2 and 2 by inserting the new values into the gray shaded cells of the given
table
d. Using the original figures, revisit questions a, b, and c based on the assumption that the reserve ratio is now 15 percent.
Assets
(4)
B
Reserves
$ 25,000
Liabilities and net worth
Checkable deposits
$ 100,000
Securites
38.000
37,000
Transcribed Image Text:Suppose that Big Bucks Bank has the simplified balance sheet shown below. The reserve ratio is 20 percent. Assets (1) Liabilities and net worth Checkable deposits $ 100,000 Reserves $ 25,000 Securites 38,000 Loans 37,000 Instructions: Enter your answers as a whole number a. What is the maximum amount of new loans that Big Bucks Bank can make? Using the table above, show in columns 1 and T how the bank's balance sheet will appear after the bank has lent this additional amount by inserting the new values into the gray shaded cells of the given table. b. By how much has the money supply changed? c. How will the bank's balance sheet appear after checks drawn for the entire amount of the new loans have been cleared agains the bank? Show the new balance sheet in columns 2 and 2 by inserting the new values into the gray shaded cells of the given table d. Using the original figures, revisit questions a, b, and c based on the assumption that the reserve ratio is now 15 percent. Assets (4) B Reserves $ 25,000 Liabilities and net worth Checkable deposits $ 100,000 Securites 38.000 37,000
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