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

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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:

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter14: Banking And The Money Supply

Section: Chapter Questions

Problem 2.3P

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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
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
The table below reports the breakdown of assets and liabilities for all commercial banks for January 2020, two months before the start of the COVID-19 recession, and December 2020. Assets (in billions of dollars) Liabilities (in billions of dollars) Jan-20 Dec-20 Jan-20 Dec-20 Loans $10,041.54 $10,376.47 Deposits $13,293.30 $16,061.82 Reserves $1,768.52 $3,168.94 Borrowings $1,965.90 $1,715.81 Treasury Securities $3,008.19 $3,726.10 Other Liabilities $593.42 $825.74 Other Assets $2,984.52 $3,224.45 Total Assets $17,802.77 $20,495.96 Total Liabilties $17,802.77 $20,495.96 From January to December, the net worth of banks changed by $___ billion (round your answer to two decimal places).
Your bank has the following balance sheet: Assets Liabilities Checkable Reserves $90 million $380 million deposits $130 Securities million Loans $200 million Bank capital $40 million If the required reserve ratio is 20%, what will be the size of this bank (as measured by its total assets or liabilities) after $20 million deposit outflow if it just meets reserve deficiency by taking out a discount loan from the Federal Reserve? $402 million $400 million. OOOO $420 million. $412 million.