Suppose that Kesha deposits $8,000 into her savings account at First Bank. The reserve requirement facing First Bank is 20%. Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign. a. Use this information to show how First Bank's assets and liabilities initially change when Kesha deposits the $8,000 in the bank.
Suppose that Kesha deposits $8,000 into her savings account at First Bank. The reserve requirement facing First Bank is 20%. Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign. a. Use this information to show how First Bank's assets and liabilities initially change when Kesha deposits the $8,000 in the bank.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter27: Money And Banking
Section: Chapter Questions
Problem 31P: Humongous Bank is the only bank in the economy. The people in this economy have 20 million in money,...
Related questions
Question
![Suppose that Kesha deposits $8,000 into her savings account at First Bank. The reserve requirement facing First Bank Is 20%.
Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign.
a. Use this information to show how First Bank's assets and liabilities Initially change when Kesha deposits the $8,000 in the bank.
A Simple Bank Balance Sheet
Assets
Change in Reserves: $
Liabilities
Change in Deposits: $
b. How much money can First Bank lend out to other people?
$
c. Now suppose that First Bank holds no excess reserves and lends out all of the excess reserves resulting from Kesha's deposit. How
do First Bank's assets and liabilities change?
A Simple Bank Balance Sheet
Assets
Change in Reserves: $
Change in Loans: $
Liabilities](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8592f3b3-859c-46ab-b392-3c205ebbc3fb%2Fb87b15ae-95b6-44f2-91c4-7174cf3e32de%2Fqk2d0n8_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Suppose that Kesha deposits $8,000 into her savings account at First Bank. The reserve requirement facing First Bank Is 20%.
Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign.
a. Use this information to show how First Bank's assets and liabilities Initially change when Kesha deposits the $8,000 in the bank.
A Simple Bank Balance Sheet
Assets
Change in Reserves: $
Liabilities
Change in Deposits: $
b. How much money can First Bank lend out to other people?
$
c. Now suppose that First Bank holds no excess reserves and lends out all of the excess reserves resulting from Kesha's deposit. How
do First Bank's assets and liabilities change?
A Simple Bank Balance Sheet
Assets
Change in Reserves: $
Change in Loans: $
Liabilities
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Principles of Economics 2e](https://www.bartleby.com/isbn_cover_images/9781947172364/9781947172364_smallCoverImage.jpg)
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
![ECON MACRO](https://www.bartleby.com/isbn_cover_images/9781337000529/9781337000529_smallCoverImage.gif)
![MACROECONOMICS](https://www.bartleby.com/isbn_cover_images/9781337794985/9781337794985_smallCoverImage.gif)
![Principles of Economics 2e](https://www.bartleby.com/isbn_cover_images/9781947172364/9781947172364_smallCoverImage.jpg)
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
![ECON MACRO](https://www.bartleby.com/isbn_cover_images/9781337000529/9781337000529_smallCoverImage.gif)
![MACROECONOMICS](https://www.bartleby.com/isbn_cover_images/9781337794985/9781337794985_smallCoverImage.gif)
![Exploring Economics](https://www.bartleby.com/isbn_cover_images/9781544336329/9781544336329_smallCoverImage.jpg)
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
![Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781337617383/9781337617383_smallCoverImage.gif)
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
![Macroeconomics](https://www.bartleby.com/isbn_cover_images/9781337617390/9781337617390_smallCoverImage.gif)