(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

See similar textbooks

Similar questions

Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 10%. Hint: If the change is negative, be sure to enter the value as negative number. Amount Deposited (Dollars) 500,000 Change in Excess Reserves (Dollars) Change in Required Reserves (Dollars) Now, suppose Southeast Mutual Bank loans out all of its new excess reserves to Neha, who immediately uses the funds to write a check to Lorenzo. Lorenzo deposits the funds immediately into his checking account at Walls Fergo Bank. Then Walls Fergo Bank lends out all of its new excess reserves to Andrew, who writes a check to Teresa, who deposits the money into her account at PJMorton Bank. PJMorton lends out all of its new excess reserves to Beth 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. Southeast Mutual Bank Walls Fergo Bank PJMorton Bank Increase in Deposits…
Suppose that Third National Bank has reserves of $20,000 and checkable deposits of $200,000. The reserve ratio is 10 percent. The bank sells $10,000 in securities to the Federal Reserve Bank in its district, receiving a $10,000 increase in reserves in return. What amount of excess reserves does the bank now have? Instructions: Enter your answer as a whole number. 2$
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 10%. Hubert, a client of First Main Street Bank, deposits $500,000 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 10%. 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) 500,000 Now, suppose First Main Street Bank loans out all of its new excess reserves to Eileen, who immediately uses the funds to write a check to Clancy. Clancy…
The commercial banking system has excess reserves of $3,000. Then new loans of $40,000 are subsequently made, and the system ends up just meeting its reserve requirements. The required reserve ratio must be ___%
Use the information given in Great Lakes National Bank's balance sheet to answer the following questions. Assets Reserves Loans Securities Bank's Balance Sheet $175 $700 $875 Liabilities and Owners' Equity Deposits $1,400 Debt Capital (owners' equity) $225 $125 Suppose the owners of the bank contribute an additional $200 from their own funds and use it to buy securities in the name of the bank. This would increase the securities 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 statements regarding the capital requirement is true? Check all that apply. Its intended goal is to protect the interests of those who hold equity in the bank. It specifies a minimum leverage ratio for all banks. Its intended goal is to protect the interests of the depositors.
Table 1 shows the financial position of Bank Uno once $3381.00 has been deposited. Assume that the required reserve ratio is 9.00%, that banks do not keep excess reserves, and that all the money loaned out from Bank Uno is deposited into Bank Duo (whose loans go to other banks not shown here). Once the lending and depositing process is complete, what will the accounts look like in Tables 2 and 3? Specify all answers to two decimal places. Table 1. Bank Uno's Initial T-Account Assets Liabilities Reserves: $3381.00 Deposits: $3381.00 Table 2. Bank Uno's T-Account After Loans Assets Liabilities Reserves: ? Deposits: ? Loans: ? Table 3. Bank Duo's T-Account After Deposits and Loans Assets Liabilities Reserves: ? Deposits: ? Loans: ? What are Bank Uno's deposits in Table 2? $ What are Bank Uno's reserves in Table 2? $ What are Bank Duo's loans in Table 3? $ What are Bank Uno's loans in Table 2? $
Use the information given in Upper Midwest National Bank's balance sheet to answer the following questions. Assets Reserves Loans Securities Bank's Balance Sheet $150 $600 Liabilities and Owners' Equity $1,200 Deposits Debt $750 Capital (owners' equity) Suppose a new customer adds $100 to his account at Upper Midwest National Bank, which the owners of the bank then use to make $100 worth of new loans. This would increase the loans account and the account. $200 This would also bring the leverage ratio from its initial value of The riskiness of each asset $100 The total value of liabilities Which of the following do bankers consider when deciding how to allocate their assets? Check all that apply. The size of the monetary base to a new value of
Megan writes a check to Harold for $100 and gives the check to Harold for his birthday, Harold alters the check to read $ 1,000 and indorses the check to Samson in exchange for flying lessons. Samson is unaware of the alteration. Samson attempts to deposit the check in his account at Southern Savings and Loan, but Southern rejects the check because of the alteration. Samson can recover: $1,000 from Megan, because Samson is a holder in due course nothing from Megan, because the check has been altered. $1,000 from Megan, because Harold is a holder in due course. $100 from Megan, because Samson is a holder in due course
The commercial banking system has excess reserves of $2,000. Then new loans of $20,000 are subsequently made, and the system ends up just meeting its reserve requirements. The required reserve ratio must be ____%.
Required reserves with a bank equal A) Total reserves plus excess reserves B) Excess reserves minus demand deposits C) Total reserves minues excess reserves D) Demand deposits plus savings account
Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 10%. Paolo, a client of First Main Street Bank, deposits $500,000 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 10%. 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) 500,000 Now, suppose First Main Street 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 immediately into…
Northern Bank: Balance Sheet Assets Liabilities Reserves Loans $780 $15,220 $16,000 Deposits Capital $13,000 $3,000 $16,000 Refer to the table above. Assume that Northern Bank's target reserve ratio is 8 percent. In order to achieve its target reserve ratio, Northern Bank must and ○ A. increase its reserves by $130; decrease its deposits by $130 ○ B. increase its reserves by $260; decrease its loans by $260 ○ C. increase its reserves by $260; decrease its deposits by $260 OD. increase its reserves by $130; increase its loans by $260 ○ E. not change its reserves; not change its deposits