Suppose that Big Bucks Bank has the simplified balance sheet shown below. The reserve ratio is 20 percent. Liabilities and net worth Assets Reserves Securities Loans 22,000 38,000 40,000 (1) (2) Checkable deposits 100,000 $ Instructions: Enter your answers as a whole number. a. What is the maximum amount of new loans that Big Bucks Bank can make? (1') (2) Using the table above, show in columns 1 and 1' how the bank's balance sheet will appear after the bank has lent this additional amount by inserting the new values into the gray shaded cells of the given table. ces b. By how much has the money supply changed? c. How will the bank's balance sheet appear after checks drawn for the entire amount of the new loans have been cleared against the bank? Show the new balance sheet in columns 2 and 2' by inserting the new values into the gray shaded cells of the given table.

Suppose that Big Bucks Bank has the simplified balance sheet shown below. The reserve ratio is 20 percent. Liabilities and net worth Assets Reserves Securities Loans 22,000 38,000 40,000 (1) (2) Checkable deposits 100,000 $ Instructions: Enter your answers as a whole number. a. What is the maximum amount of new loans that Big Bucks Bank can make? (1') (2) Using the table above, show in columns 1 and 1' how the bank's balance sheet will appear after the bank has lent this additional amount by inserting the new values into the gray shaded cells of the given table. ces b. By how much has the money supply changed? c. How will the bank's balance sheet appear after checks drawn for the entire amount of the new loans have been cleared against the bank? Show the new balance sheet in columns 2 and 2' by inserting the new values into the gray shaded cells of the given table.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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