Suppose that a lottery winner deposits $12 million in cash into her transactions account at the Bank of America (B of A). Assume areserve requirement of 10 percent and no excess reserves in the banking system prior to this deposit.Instructions: Round your responses to two decimal places.a. Use the following T-account to show how her deposit initially affects the balance sheet at B of A.Step 1 - Bank of AmericaAssets (in millions)Liabilities (in millions)ReservesDepositsRequiredExcessLoansTotal assetsTotal liabilitiesb. Has the money supply been changed by her deposit?(Click to select)c. Use the following T-account to show the changes at B of A after the bank fully uses its new lending capacity.Step 2 - Bank of AmericaAssets (in millions)Liabilities (in millions) c. Use the following T-account to show the changes at B of A after the bank fully uses its new lending capacity.Step 2 - Bank of AmericaAssets (in millions)Liabilities (in millions)ReservesDepositsRequiredExcessLoansTotal assetsTotal liabilitiesd. Has the money supply been changed by step 2?(Click to select)e. After the entire banking system uses the lending capacity of the initial ($12 million) deposit, by how much will the following havechanged?(i) Total reserves: $milhon(ii) Total deposits: $million(iii) Total loans: $million(iv) The money supply: $million

(A) ASSETS LIABILITIES RESERVES: DEPOSITS 12,000,000 REQUIRED 1,200,000 EXCESS…

Suppose that a lottery winner deposits $12 million in cash into her transactions account at the Bank of America (B of A). Assume a reserve requirement of 10 percent and no excess reserves in the banking system prior to this deposit. nstructions: Round your responses to two decimal places. a. Use the following T-account to show how her deposit initially affects the balance sheet at B of A. Step 1 - Bank of America Assets (in millions) Liabilities (in millions) Reserves Deposits Required Excess Loans Total assets Total liabilities

Suppose that a lottery winner deposits $12 million in cash into her transactions account at the Bank of America (B of A). Assume a reserve requirement of 10 percent and no excess reserves in the banking system prior to this deposit. nstructions: Round your responses to two decimal places. a. Use the following T-account to show how her deposit initially affects the balance sheet at B of A. Step 1 - Bank of America Assets (in millions) Liabilities (in millions) Reserves Deposits Required Excess Loans Total assets Total liabilities

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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