(Dollars)(Dollars)(Dollars)200,000Now, suppose First Main Street Bank loans out all of its new excess reserves to Juanita, who immediately uses the funds to write a check to Gilberto.Gilberto deposits the funds immediately into his checking account at Second Republic Bank. Then Second Republic Bank lends out all of its new excessreserves to Sam, who writes a check to Neha, who deposits the money into her account at Third Fidelity Bank. Third Fidelity lends out all of its newexcess reserves to Teresa in turn,Fill in the following table to show the effect of this ongoing chain of events at each bank. Enter each answer to the nearest dollar.Increase in DepositsIncrease in Required ReservesIncrease in Loans(Dollars)(Dollars)(Dollars)First Main Street BankSecond Republic BankThird Fidelity BankAssume this process continues, with each successive loan deposited into a checking account and no banks keeping any excess reserves. Under theseassumptions, the $200,000 injection into the money supply results in an overall increase ofv in demand deposits. 7. The money creation processSuppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The reguired reserve ratio is 5%.Lorenzo, a client of First Main Street Bank, deposits $200,000 into his checking account at First Main Street Bank.A-Complete the following table to reflect any changes in First Main Street Bank's T-account (before the bank makes any new loans).AssetsLiabilitiesComplete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 5%.bongeHint: If the change is negative, be sure to enter the value as negative number.Amount DepositedChange in Excess ReservesChange in Required Reserves(Dollars)(Dollars)(Dollars)200,00011:26 AM4/3/2022F8F9InsertPrt ScF10F11F12FnLockF1/F3F4F5F6F7DelF2Esc#324&%23Backsp16.8.9.%3D24.1WFR

Given: Required reserve ratio=5% Amount deposited=$200,000

Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 5%. Lorenzo, a client of First Main Street Bank, deposits $200,000 into his checking account at First Main Street Bank. Complete the following table to reflect any changes in First Main Street Bank's T-account (before the bank makes any new loans). Liabilities Assets Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 5%. Hint: If the change is negative, be sure to enter the value as negative number. Amount Deposited Change in Excess Reserves Change in Required Reserves (Dollars) (Dollars) (Dollars) 200,000

Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 5%. Lorenzo, a client of First Main Street Bank, deposits $200,000 into his checking account at First Main Street Bank. Complete the following table to reflect any changes in First Main Street Bank's T-account (before the bank makes any new loans). Liabilities Assets Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 5%. Hint: If the change is negative, be sure to enter the value as negative number. Amount Deposited Change in Excess Reserves Change in Required Reserves (Dollars) (Dollars) (Dollars) 200,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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7. The money creation process Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 20%. Kenji, a client of First Main Street Bank, deposits $750,000 into his checking account at First Main Street Bank. Complete the following table to reflect any changes in First Main Street Bank's T-account (before the bank makes any new loans). Assets Liabilities Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 20%. Hint: If the change is negative, be sure to enter the value as negative number. Amount Deposited Change in Required Reserves (Dollars) Change in Excess Reserves (Dollars) (Dollars) 750,000 Now, suppose First Main Street Bank loans out all of its new excess reserves to Ginny, who immediately uses the funds to write a check to Eric. Eric deposits the funds immediately into his checking account at Second Republic Bank. Then…
Suppose Southeast Mutual Bank, Walls Fergo Bank, and PJMorton Bank all have zero excess reserves. The required reserve ratio is presently set at 20%. Nick, a Southeast Mutual Bank customer, deposits $1,500,000 into his checking account at the local branch. Complete the following table to reflect any changes in Southeast Mutual Bank's T-account (before the bank makes any new loans). Assets Liabilities
Assets Vault Cash Deposits at Fed Loans Total $50,000 $200,000 $600,000 $850,000 Liabilities and Net Worth First Southern's bank reserves are equal to $ checking deposits, First Southern' would maintain $ reserves over and above the desired amount. Deposits $850,000 Total The increase in the money supply will be $850,000 If First Southern bank wanted to maintain 0.10 of its assets as reserves against as reserves. Therefore, it would have $ as additional If First Southern uses the reserves above the desired level to extend additional loans, the money supply would increase by S If First Southern wanted to maintain 0.05 of its assets as reserves against checking deposits, First Southern' would maintain S as reserves, additional reserves would be $ and the increase in the money supply would be $ if First Southern chooses a desired reserve ratio of 0.05.
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Suppose Southeast Mutual Bank, Walls Fergo Bank, and PJMorton Bank all have zero excess reserves. The required reserve ratio is presently set at 25%. Paolo, a Southeast Mutual Bank customer, deposits $1,800,000 into his checking account at the local branch. Complete the following table to reflect any changes in Southeast Mutual Bank's T-account (before the bank makes any new loans). Deposits Assets (Dollars) 1,800,000 $1,800,000 ▼ Reserves Liabilities Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 25%. Hint: If the change is negative, be sure to enter the value as negative number. Amount Deposited Change in Excess Reserves Change in Required Reserves (Dollars) (Dollars) Southeast Mutual Bank Walls Fergo Bank PJMorton Bank $450,000 Now, suppose Southeast Mutual Bank loans out all of its new excess reserves to Lucia, who immediately uses the funds to write a check to Kenji. Kenji deposits the funds…
Suppose again that checkable deposits started off as $200,000 in First Main Street Bank, the required reserve ratio (r) is 15%, with and there are no excess reserves and no cash leakage. Suppose the Fed buys $2,500 worth of government securities from First Main Street Bank. Complete the following table to reflect the Fed's purchase on the balance sheet for First Main Street Bank. Reserves Loans Assets TOTAL SCORP Liabilities Checkable Deposits Does First Main Street Bank have any excess reserves now? No; the bank has zero excess reserves. Yes; the bank has $25,500 in excess reserves. Yes; the bank has $375 in excess reserves. Yes; the bank has $2,500 in excess reserves. $200,000
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Please answer everything in the photos. Bottom question is asking which option below is the overall increase. $750,000 $6,000,000 or $7,500,000.
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If a bank currently has $10,000 Excess Reserves, $20,000 Required Reserves, and $30,000 Actual Reserves. What is the maximum amount of loans the bank could make? Multiple Choice $10,000 - up to its Excess Reserves $20,000 - up to its Required Reserves Under the above conditions, the bank could not make any additional loans $30,000 - up to its Actual Reserves