QUESTION 33LAST CHANCE BANK OF TOMBSTONEASSETScash in the vault:deposits at FedUS treasury bonds:loans:Building:TOTALS:QUESTION 34---BALANCE SHEETe) lends money to banksLIABILITIES &$900,000 demand deposits:$100,000$300,000$3,700,000$2,000,000$7,000,000capital stock:TOTALS:33. Assume a required reserve ratio of 10%, banks do not wish to hold excess reserves, and the public does not wish to increase its cash holdings. The maximum amount of new money the banking system can create is:O a) $400,000O b) $500,000c) $900,000d) $4,000,000e) $5,000,00034. When the Federal Reserve Bank wants to reduce the quantity of money in circulation, itO a) sells government securitiesb) buys government securitiesc) increases taxesO d) decreases taxesNET WORTH$5,000,000$2,000,000$7,000,000

QUESTION 33 LAST CHANCE BANK OF TOMBSTONE ASSETS cash in the vault: deposits at Fed US treasury bonds: loans: Building: TOTALS: --- BALANCE SHEET LIABILITIES & $900,000 demand deposits: $100,000 $300,000 $3,700,000 $2,000,000 capital stock: $7,000,000 TOTALS: NET WORTH $5,000,000 $2,000,000 $7,000,000 33. Assume a required reserve ratio of 10%, banks do not wish to hold excess reserves, and the public does not wish Oa) $400,000 Ob) $500,000 O c) $900,000 O d) $4,000,000 Oe) $5,000,000 increase its cash holdings. The maximum amount of new money the banking system can create is:

QUESTION 33 LAST CHANCE BANK OF TOMBSTONE ASSETS cash in the vault: deposits at Fed US treasury bonds: loans: Building: TOTALS: --- BALANCE SHEET LIABILITIES & $900,000 demand deposits: $100,000 $300,000 $3,700,000 $2,000,000 capital stock: $7,000,000 TOTALS: NET WORTH $5,000,000 $2,000,000 $7,000,000 33. Assume a required reserve ratio of 10%, banks do not wish to hold excess reserves, and the public does not wish Oa) $400,000 Ob) $500,000 O c) $900,000 O d) $4,000,000 Oe) $5,000,000 increase its cash holdings. The maximum amount of new money the banking system can create is:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assets Answer: Liabilities Required Reserves: $460000 Loans $150000 Bonds: $1940000 The above is the T-Accounts for TD bank. If the reserve ratio is 10 percent, what is the change in loans after the excess reserves are loaned out? Deposits: $2550000 Capital: 0
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12. Debit/credit card are considered to be Question 12 options: Line of credit M1 money supply Bank deposit cards M2 money supply
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Refer to Table 10.1. First Commercial Bank's total loans equal $________. First Commercial Bank Assets Liabilities + Net Worth Reserves $200,000 $1 million Deposits Required -- $200,000 Net Worth Excess $50,000 Loans -- Total $1.2 million $1.2 million Total 1,000,000. 1,050,000 1,150,000 1,200,000
9. Bank leverage Use the information presented in Northeastern Mutual Bank's balance sheet to answer the following questions. Assets Reserves Loans Bank's Balance Sheet $150 Liabilities and Owners' Equity $1,200 Deposits $600 Debt Securities $750 Capital (owners' equity) $200 $100 Suppose the owners of the bank borrow $100 to supplement their existing reserves. This would increase the reserves account and the account. This would also bring the leverage ratio from its initial value of to a new value of Which of the following is true of the capital requirement? Check all that apply. The higher the percentage of assets a bank holds as loans, the higher the capital requirement. It specifies a minimum leverage ratio for all banks. Its intended goal is to protect the interests of those who hold equity in the bank.
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Please no written by hand Use the information presented in Northeastern Mutual Bank's balance sheet to answer the following questions. Bank’s Balance Sheet Assets Liabilities and Owners' Equity Reserves $150 Deposits $1,200 Loans $600 Debt $200 Securities $750 Capital (owners' equity) $100 Suppose the owners of the bank borrow $100 to supplement their existing reserves. This would increase the reserves account and ? the ? account. This would also bring the leverage ratio from its initial value ? of to a new value of ? . Which of the following do bankers take into account when determining how to allocate their assets? Check all that apply. The total value of liabilities The riskiness of each asset The size of the monetary base
19) Vault cash is equal to $8 million, deposits by depository institutions at the central bank are $2 million, the monetary base is $40 million, and bank deposits are $90 million. The money multiplier is equal to A) 2.5. B) 3.0. C) 4.0. D) 5.0. Answer: B Please give the process of calculation
Problem 3 The current Discount Rate is 0.5%. The current Federal Funds Rate is 0.5%. The interest paid on Excess Reserves is 0.25%. Nonborrowed Reserves are $3.848tn. a) Using this information, carefully construct a channel system graph of the current market for Nonborrowed Reserves. b) What is happening to the Federal Funds Rate? c) Why do you think this is?
Question 3 (a) Distinguish between legally required reserves and excess reserves. (b) Why don’t banks hold a100 percent reserves? How is the amount of reserves bank hold related to the amount of money the banking system creates? Assume that Lucky Bank is required to hold a10% deposits as reserves, and there is a $3000 increase in demand deposits. Calculate the money multiplier? How much additional new demand deposits could the $3,000 deposit support?